Finance - Risk, Expected Return, NPV
Not what you're looking for?
41. Which of the following is the best measure of the systematic risk in a portfolio?
a. variance
b. standard deviation
c. covariance
d. beta
42. The expected return for the asset shown in the following table is 18.75 percent. If the return distribution for the asset is described as below, what is the standard deviation for the asset's returns?
Return Probability
0.10 0.25
0.20 0.50
0.25 0.25
a. 0.002969
b. 0.000613
c. 0.015195
d. 0.054486
43. Which of the following statements is most correct?
a. If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
b. If a project's internal rate of return (IRR) exceeds the cost of capital, then the project's net present value (NPV) must be positive.
c. The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the cost of capital.
d. Statements a and c are correct.
e. None of the statements above is correct.
44. You are deciding among two mutually exclusive projects. The two projects have the following cash flows:
Project A Project B
Year Cash Flow Cash Flow
0 -$50,000 -$30,000
1 10,000 6,000
2 15,000 12,000
3 40,000 18,000
4 20,000 12,000
The company's weighted average cost of capital is 10 percent. What is the net present value (NPV) of the project with the highest internal rate of return (IRR)?
a. $ 7,090
b. $ 8,360
c. $11,450
d. $12,510
e. $15,200
Purchase this Solution
Solution Summary
The solution answers 4 multiple choice question related to risk, expected return, NPV.
Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations