If the risk adjusted discount rate method and the certainty equivalent methods are to give the same results, then the certainty equivalent factor (at) must equal (where rf is the risk-free interest rate, and "k" is the risk adjusted cost of capi
) A) (1 + rf)t times (1 + k)t.
B) (1 + k)t divided by (1 + rf)t.
C) (1 + rf)t divided by (1 + k)t.
D) (1 + k)t minus (1 + rf)t.
C
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A tax whose burden, expressed as a percentage of income, increases as income increases is
A. a progressive tax. B. an ability-to-pay tax. C. a regressive tax. D. a proportional tax.
If the CPI was 108.4 in Year 1 and was 109.7 for Year 2, then the rate of Inflation between Year 1 and Year 2 was:
(a) 2.2%. (b) 1.9%. (c) 2.9%. (d) 1.2%.
The price of a new textbook is $60 in one year and $75 two years later, while the price of a used copy of the textbook increased from $25 to $37.50. The relative price of a new textbook
A) increased by 25 percent. B) increased from 2.4 to 3. C) decreased from 2.4 to 2.0. D) decreased from 1.4 to 1.25.
Every year, the U.S. allows 500,000 people from developing countries to immigrate to the U.S. permanently, which means:
A. many people resort to immigrating illegally. B. it has a lower rate of acceptance than admission rates to the most competitive U.S. colleges. C. there is a severe surplus, since 13.6 million apply to enter the U.S. D. All of these statements are true.