As a Financial Analyst,you Are Tasked with Evaluating a Capital

question 12

Multiple Choice

As a financial analyst,you are tasked with evaluating a capital budgeting project.You were instructed to use the IRR method and you need to determine an appropriate hurdle rate.The risk-free rate is 4 percent and the expected market rate of return is 11 percent.Your company has a beta of 0.75 and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past.According to CAPM,the appropriate hurdle rate would be ______%.

• A)4
• B)9.25
• C)15
• D)11
• E)0.75

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Definitions:

Brain's Reward Pathway

A neural pathway in the brain that releases dopamine in response to experiences perceived as rewarding, motivating repetition of those behaviors.

Tolerance

The need to take increasing amounts of a drug to get the same effect.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes.

Dopamine Dependence

A condition where an individual's normal neurobiological reward system becomes excessively reliant on activities or substances that significantly increase dopamine levels.