Which statement about the use of the profile model is BEST?
A)The profile model requires careful calculation of the percentage risk for each possible project.
B)The scale used for the profile model can be any two numerical variables that a company deems important.
C)The efficient frontier in the profile model is where return is 100% (or greater)and risk is 0%.
D)For a given level of risk,a positive move on the return axes would indicate a superior project.

Question

Quizplus · Accepted Answer

The statement that for a given level of risk, a positive move on the return axes would indicate a superior project is the best choice. This statement accurately describes how the profile model works - it allows companies to evaluate potential projects based on their level of risk and potential return. The efficient frontier is not necessarily at 100% return and 0% risk, and the scale used for the model can vary depending on the specific variables being evaluated. The model does not require calculation of a percentage risk for each project; instead, it allows for a comparison of the risk and return potential of different projects.

Which Statement About the Use of the Profile Model Is