Consider the following statements.

I. The expected return on the market is greater than 12%

II. The expected return for stock A is less than 26%.

III. The expected return for stock B is less than 11%.

Which of the following is correct?

a.

Statements I and II are correct, Statement III is incorrect.

b.

Statements I, II and III are incorrect.

c.

Statements I and III are correct, Statement II is incorrect.

d.

Statements I, II and III are correct.

e.

Statements II and III are correct, Statement I is incorrect.

Clear my choice

Question 14

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Question text

If the risk free rate is 5%, what hurdle rate should be used by the management of firm A for a project with the risk characteristics of firm B's stock?

a.

10.4%

b.

12.6%

c.

10.8%

d.

3.8%

Answer both please