Question: 1. What concept in the assigned chapter describes the minimum rate of return that must be earned from investments to ensure the value of the

1. What concept in the assigned chapter describes the minimum rate of return that must be earned from investments to ensure the value of the firm does not decrease?

2. What type of investment security requires use of the capital asset pricing model (CAPM) to determine its value based on risk factors, and what is the criteria for using CAPM?

3. What type of investment requires use of the weighted average cost of capital (WACC), and what is the intended purpose of using WACC to evaluate such investments?

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