The NPV and IRR Methods,when Used to Evaluate Two Independent

question 97

True/False

The NPV and IRR methods,when used to evaluate two independent and equally risky projects,will lead to different accept/reject decisions and thus capital budgets if the projects' IRRs are greater than their costs of capital.

---

Definitions:

Stock Price

The current price at which a share of stock can be bought or sold on the stock market.

Implied Volatility

The market's forecast of a likely movement in a security's price, often derived from the price of options on that security.

Black-Scholes

A mathematical model used for pricing European style options and understanding the dynamics of options markets.

Standard Deviation

Standard Deviation is a statistical measurement that represents the degree of variation or dispersion from the average, often used to quantify the risk of investment returns.