a lonesome gulch mines has a standard deviation


(a) Lonesome Gulch Mines has a standard deviation of 42% per year and a beta of 0.10.  Amalgamated Copper has a standard deviation of 31% a year and a beta of 0.66.  Which is a safer investment?  Why?   

(b) In class we called NPV the "gold standard" of investment decision rules.  What makes this so?  IRR is closely related to NPV.. Why not use that instead?

 

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