A Project Has an Expected Risky Cash Flow of $200

question 61

Multiple Choice

A project has an expected risky cash flow of $200 in year 1. The risk-free rate is 6 percent, the expected market rate of return is 16 percent, and the project's beta is 1.50. Calculate the certainty equivalent cash flow for year 1, CEQ₁.

• A)$175.21
• B)$165.29
• C)$228.30
• D)$182.76

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