13) An investor is considering investing in only one of the following securities: А B с Expected Return 0.10 0.10 0.15 S

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13) An investor is considering investing in only one of the following securities: А B с Expected Return 0.10 0.10 0.15 Standard Deviation 0.05 0.06 0.09 Which of the following statements is true? A) Securities A and B are equally desirable if the investor is risk-averse. B) Security C is more desirable than Security A if the investor is very risk-averse. C) Securities B and Care of equal relative risk. D) Security B is relatively less risky than Security C. 14) The net present value of a capital budgeting project is A) the present value of the expected future cash flows divided by the initial cash outflow B) the initial cash outflow divided by the present value of the expected future cash flows C) the initial cash outflow divided by the average of expected future cash inflows D) the difference between the present value of the expected future cash flows and the initial cash outflow 15) An investment proposal has an initial cash outlay of $100,000 and a net present value of $50,000. The project's profitability index is A) 1.00 B) 1.50 C) 0.50 D) 2.00 16) The profitability index is the A) difference between the project's initial cash outflow and the present value of the expected future cash flows. B) project's initial cash outflow divided by the present value of the expected future cash flows. C) sum of the project's initial cash outflow and the present value of the future expected cash flows. D) present value of the expected future cash flows divided by the project's initial cash outflow.