Hubert, LLC asks you to determine its annual expected shortfall (CVaR), at a 10% statistical significance, or 10% probability. Their 5 prior worst years losses, out of the last 20 years, are as follows: -35%, -29%, -24%, -22%, and -20%. Huberts expected shortfall, assuming 10% statistical significance (probability) is: Group of answer choices -29% -24% -57% -32%

Red Raiders, Inc. is evaluating 2 possible, mutually exclusive capital projects. Project A calls for replacing old servers with new, faster computers. Project B calls for expansion into a new market. One way to account for the different risk levels of these 2 projects is to:

Group of answer choices

Assign the same discount rates, but different probabilities to the 2 projects

Assign Project A a 10% discount rate, assign project B a 5% rate, and and compare their NPV's

Run IRR and compare that for the 2 projects

Assign Project A a 5% discount rate, assign project B a 10% rate, and and compare their NPV's

McConnells Pizzeria is considering updating replacing its pizza ovens. They are evaluating 2 proposals from his supplier, both of which cost $12,000. Due to faster baking times, they estimate improvements in operating income as follows:

Year Oven A Oven B

1 $6,000 $7,000

2 $3,000 $2,000

3 $4,000 $5,000

Using only payback period method, which oven should McConnell invest in?

Group of answer choices

Oven B

Either one; their payback periods are equal

Oven A

Not enough data to answer

All of the following are functions of a finance manager, except:

Group of answer choices

Determining best way to finance a merger

Assessing risk in a capital project

Forecasting unit sales of a new product capital project under different market conditions

Recommending a firms dividend policy

All of the following are ways to estimate a firms projected return on equity, except:

Group of answer choices

Dividend Discount Model

Yield to Maturity

The firm's excess market return, adjusted for its market risk

Capital Asset Pricing Model