Business Administration

Currently under consideration is an investment with a beta, $b$, of 1.50. At this time, the risk-free rate of return, $R_F$, is 7% , and the return on the market portfolio of assets, $r_m$, is 10%. You believe that this investment will earn an annual rate of return of 11%.

(a) If the return on the market portfolio were to increase by 10%, what would you expect to happen to the investment’s return? What if the market return were to decline by 10%?

(b) Use the capital asset pricing model (CAPM) to find the required return on this investment.

(c) On the basis of your calculation in part b, would you recommend this investment? Why or why not?

(d) Assume that as a result of investors becoming less risk-averse, the market return drops by 1% to 9%. What impact would this change have on your responses in parts b and c?

How do various characteristics of a problem ascertain the type of decision-making strategy to be adopted? What other conditions, as well as various types of decision-making biases and errors, may affect the decision-making process?

What is Quality Function Deployment? How can a “House of Quality” be used as a tool for QFD? Elaborate the seven basic steps to build a house of quality. Nikon Inc., wants to design a new digital camera. Prepare a hypothetical house of quality for product design of their new digital camera based on the emerging trends in the market.

What are the unique characteristics of a service? What marketing strategies a firm can employ for service firms? How can marketers manage service differentiation, service quality and service productivity?

What is price? Explain the major pricing strategies specifically with respect to new product pricing, product-mix pricing, and price-adjustment strategies.

What are high-performance work systems? Explain their essential elements, possible outcomes, necessary conditions and ways to measure the effectiveness of such work systems.