Multiple Choice
A project has an expected risky cash flow of $500 in year 3. The risk-free rate is 4 percent, the expected market rate of return is 14 percent, and the project's beta is 1.20. Calculate the certainty equivalent cash flow for year 3, CEQ3.
A) $622.04
B) $360.33
C) $401.90
D) $693.82
Correct Answer:
Verified
Correct Answer:
Verified
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