In the risk-adjusted discount rate approach to account for risk,  the cost of capital a.is the same as the risk-free rate.b.is smaller than the risk-free rate and falls with falling risk.c.is greater than the risk-free rate and rises with increasing risk.d.is greater than the risk-free rate and falls with increasing risk.

The risk-adjusted discount rate method assumes that the risk increases with time atIncreasing rateDecreasing rateA random rateA constant rate

1. If the risk-free rate falls, the certainty equivalent adjustment factor will:a.rise for risk averse investors.b.fall for risk averse investorsc.fall for risk seeking investorsd.None of the above.

The company cost of capital is the appropriate discount rate for a firm's:Group of answer choiceslow-risk projects.risk-free projects.average-risk projects.high-risk projects.

Rising interest-rate riskA) increased the cost of financial innovation.B) increased the demand for financial innovation.C) reduced the cost of financial innovation.D) reduced the demand for financial innovation.

Which of the following is NOT a determinate of cap rate in the property asset market? O a. Risk-free rate O b. Perceived risk for the property price appreciation O c. Expected growth in property rent O d. Comparable yields in the capital market O e.Stock adjustment rate in the space market