1. Which of the following portfolios will have the highest beta ?
A portfolio of U.S. Treasury Bills
A portfolio of U.S. Government bonds
A portfolio containing 50% U.S. Treasury Bills and 50% U.S.Government bonds
A portfolio of U.S. common stocks
2. Which of the following is NOT a relevant cash flow and thus should NOT be reflected in the analysis of a capital budgeting project?
a. Cannibalization effects.
b. Changes in net operating working capital.
c. Sunk costs that have been expensed for tax purposes.
d. Shipping and installation costs for machinery acquired.
e. Opportunity costs