QUESTION: 69

The investment proposal with the greatest relative risk would have:

The highest standard deviation of net present value
The highest coefficient of variation of net present value
The highest expected value of net present value
The lowest opportunity loss likelihood

Answer(s): B

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QUESTION: 70

A safe-deposit box is a rented drawer in a bank's vault. Boxes can be rented for:

$40
$30
$40-$85
$90

Answer(s): C

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QUESTION: 71

Probability-tree analysis is best used when cash flows are expected to be:

Independent over time
Risk-free
Related to the cash flows in previous periods
Known with certainty

Answer(s): C

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You are considering two mutually exclusive investment proposals, project A and project B B's expected value of net present value is $1, 000 less than that for A and A has less dispersion. On the basis of risk and return, you would say that

Project A dominates project B
Project B dominates project A
Project A is more risky and should offer greater expected value
Each project is high on one variable, so the two are basically equal

Answer(s): A

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Free CTFA Exam Braindumps (page: 18)

QUESTION: 69

QUESTION: 70

QUESTION: 71

QUESTION: 72