1. What is the main benefit of using Accelerated Depreciation versus Straight Line Depreciation?
The project depreciates sooner and saves the company money
It allows the company to defer taxes until the end of the project
It decreases the overall tax burden of the company
There is no benefit between the two
2. You have an investment that consists of 3 stocks. Stock 1 is worth $20,000 with a beta of 0.95.
Stock 2 is worth $7,000 and has a beta of 1.1. Stock 3 is worth $15,000 and has a beta of 1.4.
What is the portfolio standard deviation if the Market Standard Deviation (σM) is 20%?
22.7%
21.3%
23.1%
20.7%