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Which of the following is the best measure of the systematic risk in a portfolio?

Capital rationing implies that

McNamara Hotels has 750,000 bonds outstanding, each with a $1,000 face value and 10 years to maturity. The bonds pay semi-annual coupon payments at an annual coupon rate of 7.08%. Currently, the bonds are trading on the secondary market at $942 per bond. The company has no other debt outstanding.What is the company’s annual cost of debt?Hint: Enter your answer as a percentage rounded to two decimals. Note: this is not an accounting question—I’m not looking for interest expense in dollars.

If the returns for two assets have a correlation coefficient of one, then there are no benefits of diversification by combining these assets in a two-asset portfolio.

The discount rate used to determine the present value of future cash flows is called the cost of capital.

When two projects have cash flows that are tied to each other, the projects may be classified as independent.

Whenever the outcome of an event has a number of different possibilities that have equal probability of occurrence, then the expected value of the outcome is equal to the simple average of the individual events.

The discounted payback period calculation calls for the future cash flows to be discounted by the firm’s cost of capital.

In evaluating capital projects, the decisions using the NPV method and the IRR method may disagree if

The market risk-premium is equal to expected return on the market portfolio.