Project C Has Been Classified into Risk Class II by the Analyst

question 18

Multiple Choice

Project C has been classified into risk class II by the analyst of a major firm.The risk premium required for projects in this risk class is 8%.The current risk-free rate measured by the analyst is 10%.If the project has an estimated return of 20%, the analyst would recommend

• A)accepting project C
• B)rejecting project C
• C)re-estimating the risk premiums for class II projects
• D)none of these

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Definitions:

Social Class

Categories of individuals in a society who share similar levels of wealth, status, and power, influencing their opportunities and life experiences.

Gender

The range of characteristics pertaining to, and differentiating between, masculinity and femininity, often based on social and cultural distinctions rather than biological ones.

Ethnicity

A social category that divides people based on common cultural, ancestral, language, or national experiences, often marked by shared traditions and heritage.

Socioeconomic Gradient

A term used to describe the stepped levels of economic and social position or status that typically influence individuals' health, access to resources, and life opportunities.