Assume there is a project where the firm will initially invest $195,000 to receive $54,000 at Year 1, $55,000 at Year 2, $34,000 at Year 3, $55,000 at Year 4, $49,500 at Year 5, and $90,500 at Year 6. If the interest/discount rate is 10.32%, what is the profitability index?

1.11

1.22

0.98

1.04

Which of the following is not true?

Generally, the geometric average return has a different value from the arithmetic average return.

One can calculate the stocks risk premium by subtracting the risk-free rate from the firms rate of return.

The type of efficient market hypothesis that is most often used to forecast stock prices is called the weak form of the efficient market hypothesis.

None of the above (all of the above are correct).