Which of the Following Evaluation Methods Ignores the Time Value

question 91

Multiple Choice

Which of the following evaluation methods ignores the time value of money?

• A)The accounting rate-of-return and discounted cash flow methods
• B)The net present value and discounted cash flow methods
• C)The payback period and net present value methods
• D)The accounting rate-of-return and payback period methods

Know how to use Excel views and settings to adjust page layout and print settings.

Recognize and correct errors in Excel worksheet.

Understand how to select and manipulate cells and cell content in Excel.

Learn the distinction between absolute and relative cell references and their applications.

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Definitions:

Risk Premium

The additional return an investor requires to invest in a risky asset compared to a risk-free asset, compensating for the higher risk.

Arbitrage

The practice of profiting from price differences of the same asset in different markets, exploiting inefficiencies without market risk by simultaneously buying and selling.

Expected Rate of Return

The mean amount of profit or loss one can expect from an investment, accounting for all possible outcomes.

Adjusted Beta

A measure that adjusts a security's beta (volatility relative to the market) based on its historical performance, to provide a more relevant estimation of its future volatility.