A Stock Is Expected to Return 10% When the Risk-Free

question 13

Multiple Choice

A stock is expected to return 10% when the risk-free rate is 4%.What is the correct discount rate to use for the expected payoff on an option in the real world?

• A) 4%
• B) 10%
• C) More than 10%
• D) It could be more or less than 10%

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Definitions:

Master Schedule

A comprehensive plan that includes the timelines, milestones, and resources necessary to complete a project.

Major Activities

Essential tasks or actions that significantly impact the progression and success of a project.

Assigned Resources

Refers to the specific personnel, equipment, or capital allocated to a particular task or project.

Early Start Date

The earliest possible date on which a particular task or activity can begin, assuming all prior necessary conditions are met.