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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 a) Project A dominates project B. b) Project B dominates project A. c) Project A is more risky and should offer greater expected value. d) Each project is high on one variable, so the two are basically equal. |
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Answer» a) Project A dominates project B. |
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