07. True or False? Rational investors should simultaneously seek to maximize return and minimize risk. However,...

07. True or False? Rational investors should simultaneously seek to maximize return and minimize risk. However, this is simply not possible in reality. a. True b. False 08. True or False? The cost of equity a company faces is simply the rate of return shareholders demand to own its shares. a. True b. False 09. True or False? The Weighted-Average Cost of Capital (WACC) should be calculated using the book values of debt and equity to compute the relative weights of each source of capital. a. True b. False 10. True or False? Among the eight portfolios considered in the International Diversification application, the most desirable one is the one with the most binding constraints. a. True b. False

Expert Solution

07. True or False? Rational investors should simultaneously seek to maximize return and minimize risk. However, this is simply not possible in reality.:

TRUE because higher return comes with higher risk. Therefore, investor try to maximise Risk Adjusted return.

08. True or False? The cost of equity a company faces is simply the rate of return shareholders demand to own its shares.:

TRUE, it is the financial return that the shareholder required.

09. True or False? The Weighted-Average Cost of Capital (WACC) should be calculated using the book values of debt and equity to compute the relative weights of each source of capital.:

FALSE Market Value weight is more appropiate because MV of securities are closer to the actual amount that would be received from its sale.

10. True or False? Among the eight portfolios considered in the International Diversification application, the most desirable one is the one with the most binding constraints. a. True b. False

I am unable to answer this because of unavailability of required information.

jeff jeffy answered 1 year ago

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