The risk free rate is 3%, the market risk premium is 6% and the CAPM holds. Your firm uses a constant hurdle rate for all decisions of 10%, but has projects of varying risk.  Indicate on the graph below the regions where (a) you correctly accept projects, (b) you correctly reject projects, (c) you incorrectly accept projects, and (d) you incorrectly reject projects.

Answer rating: 100% (QA)

In the context of the Capital Asset Pricing Model CAPM and varying project risks the graph would typ... View the full answer