You are analyzing 2 projects. Details are as follows: Probability Exp. Return Po

ID: 2719222 • Letter: Y

Question

You are analyzing 2 projects. Details are as follows:

Probability Exp. Return

Poland Costa Rica

Best case .30 .15 .18

Most likely .50 .14 .12

Worst case .20 .05 .06

1. T/F Poland has the higher expected return.

2. T/F Costa Rica has the higher risk.

3. List 2 mechanisms of corporate governance.

4. T/F Agency problems arise when the goals of the principals and agents conflict.

True/False. The question is True or False: Poland has the higher expected return

False

True or False: Costa Rica has the higher risk.

Answer

True

True or False: Agency problems arise when the goals of the principals and agents conflict.

Answer True

Poland Costa Best 0.045 0.054 Most 0.07 0.06 Worst 0.01 0.012 12.50% 12.60%

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