The expected return on a portfolio: i. can never exceed the expected return of the best performing security in the portfolio. ii. must be equal to or greater than the expected return of the worst performing security in the portfolio. iii. is independent of the unsystematic risks of the individual securities held in the portfolio. iv. is independent of the allocation of the portfolio amongst individual securities

Garrett is an executive vice president at samm hardware. he researches a proposal by a larger company, maximum hardware, to combine the two companies. by analyzing past performance, conducting focus groups, and interviewing maximum employees, garrett concludes that maximum has poor profit margins, sells shoddy merchandise, and treats customers poorly. what actions should garrett and samm hardware take? a. turn down the acquisition offer and prepare to resist a hostile takeover. b. attempt a friendly merger and use managerial hubris to improve results at maximum. c. welcome the acquisition and use knowledge transfer to impart sam hardware's management practices. d. do nothing; the two companies cannot combine without samm hardware's explicit consent.