Considering an investment in project-financial intermediary

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Reference no: EM131343203

1. Nob-Orrow Inc. is considering an investment in a project that is similar in risk to its existing projects. The firm makes no use of debt and is entirely financed by common stock with a beta of 1.4. The expected return on the market portfolio is 10 percent and the treasury bill rate is 4 percent. The required rate of return on this project is:

A. 14%

B. 6%

C. 12.4%

D. 10%

E. None of the above

2. Which of the following is not a financial intermediary?

A. New York Stock Exchange

B. Washington Savings and Loan

C. First National City Bank

D. Merchants Savings Bank

Reference no: EM131343203

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