A Major Disadvantage of the Risk-Adjusted Discount Rate Approach Is

question 51

Multiple Choice

A major disadvantage of the risk-adjusted discount rate approach is that it _____.

• A) can lead to selecting only above-average risk projects
• B) provides the decision maker with a range of numbers
• C) can lead to selecting only below-average risk projects
• D) is difficult to estimate the appropriate risk premium for a project

---

Definitions:

Identical Twins

Twins who develop from a single fertilized egg that splits in two, creating two genetically identical organisms.

Fraternal Twins

Twins who develop from separate fertilized eggs. They are genetically no closer than brothers and sisters, but they share a fetal environment.

Neuroticism

A personality trait characterized by moodiness, anxiety, and emotional instability.

Extraversion

A personality trait that is characterized by outgoingness, high energy, and sociability.