Question $2$

Evaluate the following statements about the DCF analysis.

$1.$ If we discount risky cash flows with a risk$-$free discount rate, the present value of risky cash flows would be overstated, holding all other things constant.

II$.$ The mid$-$year discounting would result in a lower present value, holding allother things constant.

III. Cash flows in nominal terms should be discounted with a nominal discount rate.

Note. Assume all types of discount rates are positive.None of the three statements are true.All three statements are true.I and III only are true.III only is true.II and III only are true.