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Project C Has Been Classified into Risk Class II by the Analyst

Question 18

Multiple Choice

Project C has been classified into risk class II by the analyst of a major firm.The risk premium required for projects in this risk class is 8%.The current risk-free rate measured by the analyst is 10%.If the project has an estimated return of 20%, the analyst would recommend


A) accepting project C
B) rejecting project C
C) re-estimating the risk premiums for class II projects
D) none of these

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