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A Project Has an Expected Risky Cash Flow of $200

Question 34

Multiple Choice

A project has an expected risky cash flow of $200, in year-1. The risk-free rate is 6%, the market rate of return is 16%, and the project's beta is 1.5. Calculate the certainty equivalent cash flow for year-1.


A) $175.21
B) $164.29
C) $228.30
D) None of the above

Correct Answer:

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