Question
To determine whether an investment has a positive NPV, you can compare the expected return on that new investment to what the financial market offers on an investment with Blank______.
Multiple choice question.
the same beta
half the beta
half the variance
twice the standard deviation
Multiple choice question.
the same beta
half the beta
half the variance
twice the standard deviation
Answers
GPT-4o mini
To determine whether an investment has a positive NPV, you can compare the expected return on that new investment to what the financial market offers on an investment with **the same beta**.
This is because beta measures the systematic risk of an investment relative to the market, and it's important to compare investments with similar levels of risk when evaluating their expected returns.
This is because beta measures the systematic risk of an investment relative to the market, and it's important to compare investments with similar levels of risk when evaluating their expected returns.