Which of the following statements is true? Group of answer choices Market risk premium is defined as the difference between the market rate of return and the return on risk-free Treasury bills. Diversification decreases the variability of both unique and market risk. A project should be accepted if its return plots below the security market line. Project cost of capital and company cost of capital are synonymous terms.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter3: Risk And Return: Part Ii
Section: Chapter Questions
Problem 8MC
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Which of the following statements is true? Group of answer choices Market risk premium is defined
as the difference between the market rate of return and the return on risk-free Treasury bills.
Diversification decreases the variability of both unique and market risk. A project should be accepted
if its return plots below the security market line. Project cost of capital and company cost of capital
are synonymous terms.
Transcribed Image Text:Which of the following statements is true? Group of answer choices Market risk premium is defined as the difference between the market rate of return and the return on risk-free Treasury bills. Diversification decreases the variability of both unique and market risk. A project should be accepted if its return plots below the security market line. Project cost of capital and company cost of capital are synonymous terms.
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