1) The best method to use in deciding between mutually exclusive projects with equal useful life is ___________.

a. the Profitability Index

b. all of THESE

c. the IRR

d. the NPV

2) The Canadian and U.S. stock markets are more integrated than the Canadian and Japanese stock markets.

True

False

3) According to the CAPM, the expected return on a stock with a standard deviation of 40% and a beta of 0.9 will be higher than the expected return of an alternative stock with a standard deviation of 30% and a beta of 1.2.

True

False

4) If an investment pays an annual rate of 6% compounded monthly, then the quarterly interest rate is 1.5%.

True

False