1. What is price pressure? How does it effect pharmaceutical companies? What are 2 other industries that have dealt with price pressure? What are two strategies that these industries use to reduce their costs and the effects of price pressure?
2. UPS, a delivery services company, has a beta of 1.0, and Wal-Mart has a beta of 0.5. The risk-free rate of interest is 4% and the market risk premium is 6%. What is the expected return on a portfolio with 40% of its money in UPS and the rest in Wal-Mart?