Which One of the Following Adjustment Techniques Would Be Preferred

question 41

Multiple Choice

Which one of the following adjustment techniques would be preferred to account for additional project risk?

• A) Increase the discount rate
• B) Adjust expected cash flows downward
• C) Increase the beta
• D)Adjust the market risk premium

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Definitions:

Individualistic Cultures

Cultures that emphasize personal achievements and individual rights, often prioritizing personal goals over group ones.

Openness to Change

The willingness to modify one’s behavior, attitudes, or beliefs in response to new information or experiences.

Conservatism

A political and social philosophy promoting traditional institutions and practices, emphasizing stability, and often resisting rapid changes in society.

Self-Transcendence

A trait dealing with the expansion of personal boundaries, including experiencing spiritual aspects and unifying with other people and the world.