An Estimation of the Opportunity Cost of Capital for Projects

question 2

Multiple Choice

An estimation of the opportunity cost of capital for projects that have an "average" level of risk is the rate of return on:

• A)treasury bills.
• B)the market portfolio.
• C)the market portfolio minus the rate of return on treasury bills.
• D)treasury bonds plus a maturity premium.

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Definitions:

Argument

A set of statements or reasons made to support or oppose a proposition.

Cheerleading

An activity involving performance of routines consisting of tumbling, dance, jumps, cheers, and stunting to direct spectators’ attention to events and support sports teams.

Promotion

The process or act of raising someone to a higher position or rank, or the act of advertising or pushing for the sale of products or services.

Argument

A series of statements or reasons made to support or oppose a conclusion.