What is a capital budgeting technique

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Problem 1: What is typically considered to be the return on U.S. government bonds and bills and equals the real interest and the expected inflation premium?

a. Required return.

b. Risk-free rate.

c. Risk premium.

d. Market risk premium.

Problem 2: What is a measure of the sensitivity of a stock or portfolio to market risk?

a. Behavioral finance.

b. Beta.

c. Efficient market.

d. Hedge.

Problem 3: What is a capital budgeting technique that generates a decision rule and associated metric for choosing projects, based on the total discounted value of their cash flows?

a. Payback.

b. Net present value.

c. Internal rate of return

d. Profitability index.

Reference no: EM132833992

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