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1. What allows portfolio diversification to be achieved?

A. The inclusion of stocks with low standard deviations.

B. None of these answers is correct.

C. Certain stocks having high Sharpe ratios.

D. Stocks with high expected returns.

2. If we use the "growing perpetuity value" approach to calculate the terminal value, we

A. typically assume a relatively low terminal growth for free cash flows.

B. All of these answers are correct.

C. must assume that the terminal growth rate of free cash flows is less than the asset cost of capital.

D. must use the formula TV = FCF_n(1+g)/(R_A- g)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92833049

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