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(a) In an effort to embrace environmentally conscious investments, Electric Rail Inc. is planning to procure 10 Electric Trains costing a million dollar each. The
(a) In an effort to embrace environmentally conscious investments, Electric Rail Inc. is planning to procure 10 Electric Trains costing a million dollar each. The trains are expected to run from January 2022. The firm's investors demand at least a yearly return of 10% if the project goes through. Is the project worth taking if the expected stream of income over the next 3 years is follows? . . 2022-USD 4 million 2023-USD 5 million 2024 USD 6 million (b) The expected return of Archer Pharmaceuticals is 3.85%, and standard deviation is 15%. This vaccine manufacturer's stock moves on average 90% in the direction of the stock market. Meanwhile, Can Vax Chemicals has expected return of 5.08%, standard deviation of 25%, and beta of 1.25. Both stocks are traded in the same stock exchange. Find the expected return of the market. What is the risk-free rate of return? What is the market return? YE
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