What is the risk-free rate and what is a risk premium

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When will IRR and NPV rule give you the same investment decision? When might IRR not exist or not be unique? What happens to the NPV as we assume very high or very close to zero discount rates?

What is in a discount rate? What is the risk-free rate? What is a risk premium?

What is the difference between idiosyncratic and systematic risk? What do investor’s demand compensation for? Why?

What is the diminishing marginal utility for wealth and how is it related to risk aversion?

Under the CAPM, What is the relationship between risk and return? How do we estimate risk premia? What is beta and how does it relate to expected returns? Why might firms differ in their betas? Can a firm or asset have negative beta? What is the market portfolio and can we observe it?

Reference no: EM131932631

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