Question: A risk-free security is selling for $80 and will return $84, with certainty, in one year. Consider the following four investment projects: Project Cash flow

A risk-free security is selling for $80 and will return $84, with certainty, in one year. Consider the following four investment projects: Project Cash flow today ($ million) Cash flow in one year ($ million) A -50 60 B 30 -25 C -100 95 D -20 30 a) What is the risk-free rate? b) Of the four projects listed, which one would you select if you could only invest in one project? Why

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