The Opportunity Cost of Capital for a Risky Project Is

Multiple Choice

The opportunity cost of capital for a risky project is:

A) the expected rate of return on a government security having the same maturity as the project.
B) the expected rate of return on a well-diversified portfolio of common stocks.
C) the expected rate of return on a security of similar risk as the project.
D) The expected rate of return on a typical bond portfolio.