Exclusive investment opportunities

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Reference no: EM133072189

Question 1

If an investor is considering two mutually exclusive investment opportunities, which option should be selected?

A. Investment with the lowest NPV

B. Investment with the highest NPV

Question 2

A. NPV declines

B. We do not have enough information to answer this question

C. NPV increases

D. NPV is unchanged

Question 3

A. Long-term US government bonds

B. Cash on the balance sheets of banks and other financial intermediaries

C. Short-term debt instruments with maturity of five years or less

D. Short-term debts with maturity of one year or less

Question 4

What happens to the dollar discount of a Treasury bill if the price declines relative to the face value?

A. Dollar discount could increase or decrease in this situation

B. Dollar discount remains the same

C. Dollar discount increases

D. Dollar discount declines

Question 5

A. All four projects

B. Projects A, B, and D

C. Project B

D. Projects A, C, and D

Question 6

You expect to receive a debt payment in 120 days. Which rate should you use to compute the present value of this payment?

A. 10-year Treasury bond yield

B. Prime interest rate

C. Holding period yield

D. Money market yield

Reference no: EM133072189

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