Question
When making investment decisions, which of the following are true regarding the interest rate (select all that apply) I. The risk of an investment should
When making investment decisions, which of the following are true regarding the interest rate (select all that apply)
I. | The risk of an investment should not affect the interest rate used to discount its cash flows. | |
II. | The risk free rate is the correct interest rate to use to discount cash flows that will happen with certainty. | |
III. | The higher the risk of an investment, the higher the interest rate should be to discount cash flows from that investment. | |
IV. | The risk free rate is not the correct interest rate to use to discount cash flows that will happen with certainty. |
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