If Returns on Security a Are More Volatile Than the Returns

question 46

Multiple Choice

If returns on security A are more volatile than the returns on security B, the geometric average return of security A is ________ the geometric average return of security B when their arithmetic average return is the same.

• A)lower than
• B)the same as
• C)higher than
• D)cannot say for sure

Evaluate the option to wait in project decision-making under conditions of technological change and uncertain economic scenarios.

Understand the concept of capital rationing and its effects on project financing and selection.

Perform sensitivity analysis by adjusting project variables to understand range outcomes.

Understand the concept of depreciation and its impact on cash flow and tax liabilities.

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