【正文】 you need to determine an appropriate hurdle rate. The riskfree rate is 4% and the expected market rate of return is 11%. Your pany has a beta of and the project that you are evaluating is considered to have risk equal to the average project that the pany has accepted in the past. According to CAPM, the appropriate hurdle rate would beA.7%.C.11%.E.35.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 riskfree rate is 4% and the expected market rate of return is 11%. Your pany has a beta of and the project that you are evaluating is considered to have risk equal to the average project that the pany has accepted in the past. According to CAPM, the appropriate hurdle rate would beA.7%.C.4%.E.36.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 riskfree rate is 4% and the expected market rate of return is 11%. Your pany has a beta of and the project that you are evaluating is considered to have risk equal to the average project that the pany has accepted in the past. According to CAPM, the appropriate hurdle rate would beA.%.C.11%.E.37.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 riskfree rate is 4% and the expected market rate of return is 11%. Your pany has a beta of and the project that you are evaluating is considered to have risk equal to the average project that the pany has accepted in the past. According to CAPM, the appropriate hurdle rate would beA.%.C.11%.E.38.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 riskfree rate is 5% and the expected market rate of return is 10%. Your pany has a beta of and the project that you are evaluating is considered to have risk equal to the average project that the pany has accepted in the past. According to CAPM, the appropriate hurdle rate would beA.5%.C.%.E.39.The riskfree rate is 4%. The expected market rate of return is 11%. If you expect CAT with a beta of to offer a rate of return of 10%, you shouldA.sell short CAT because it is overpriced.C.buy CAT because it is underpriced.E.40.The riskfree rate is 4%. The expected market rate of return is 11%. If you expect CAT with a beta of to offer a rate of return of 11%, you shouldA.sell short CAT because it is overpriced.C.buy CAT because it is underpriced.E.41.The riskfree rate is 4%. The expected market rate of return is 11%. If you expect CAT with a beta of to offer a rate of return of 13%, you shouldA.sell short CAT because it is overpriced.C.buy CAT because it is underpriced.E.42.You invest 55% of your money in security A with a beta of and the rest of your money in security B with a beta of . The beta of the resulting portfolio isA..C..E.43.Given are the following two stocks A and B:If the expected market rate of return is and the riskfree rate is , which security would be considered the better buy and why?A.B because it offers an expected excess return of %.C.B because it offers an expected return of 14%.E.44.Capital asset pricing theory asserts that portfolio returns are best explained byA.specific risk.C.diversification.directly with alpha.B.directly with beta.D.in proportion to its standard deviation.The market rate of return.B.A negative rate of return.D.47.Standard deviation and beta both measure risk, but they are different in that beta measuresA.only systematic risk while standard deviation is a measure of total risk.C.both systematic and unsystematic risk while standard deviation measures only systematic risk.E.48.The expected returnbeta relationshipA.refers to the way in which the covariance between the returns on a stock and returns on the market measures the contribution of the stock to the variance of the market portfolio, which is beta.C.All of the options are true.E.49.The security market line (SML)A.can be portrayed graphically as the expected returnstandard deviation of market returns relationship.C.can be portrayed graphically as the expected returnbeta relationship and provides a benchmark for evaluation of investment performance.E.50.Research by Jeremy Stein of MIT resolves the dispute over whether beta is a sufficient pricing factor by suggesting that managers should use beta to estimateA.shortterm returns but not longterm returns.C.booktomarket ratios.E.51.Studies of liquidity spreads in security markets have shown thatA.illiquid stocks earn higher returns than liquid stocks.C.illiquid stocks are good investments for frequent, shortterm traders.on the security market line.B.above the security market line.D.either above or below the security market line depending on its standard deviation.on the security market line.B.above the security market line.D.either above or below the security market line depending on its standard deviation.the average degree of risk aversion of the investor population.B.the risk of the market portfolio as measured by its beta.D.the average degree of risk aversion of the investor population and the risk of the market portfolio as measured by its beta.