Author Question: An increase in nondiversifiable risk would ________. A) cause an increase in the beta and would ... (Read 100 times)

charchew · **on:** Jul 10, 2018

An increase in nondiversifiable risk would ________.

A) cause an increase in the beta and would lower the required return
B) have no effect on the beta and would, therefore, cause no change in the required return
C) cause an increase in the beta and would increase the required return
D) cause a decrease in the beta and would, therefore, lower the required rate of return

Question 2

If a firm is subject to capital rationing, it has only a fixed number of dollars available for capital expenditures and numerous projects compete for these dollars.

Indicate whether the statement is true or false