1. Which one of the following is FALSE for a project whose NPV equals zero?
The project earns more than the required return.
The projects cash outflows are equal to the present value of the cash inflows.
The project will have no impact on firm value.
The IRR is equal to the required rate of return
2. "The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 12%. Based on this information, which one of the following must be true? "
The beta of the market portfolio must be 3.0
Portfolio XYZ is highly affected by swings in the market.
The risk free rate of return must be 3%.
The beta of portfolio XYZ must be less than 1.0