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Discount rates and investment

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I need assistance with the following assignment:

Discount rates will vary based upon your own personal level of risk tolerance. For example, I might be willing to buy a risky stock if I think I'll earn 10% while my wife would need at least 20% before she'd consider it. What's your discount rate for the following types of equities? And how did you determine that rate?

a) A risk free equity (a US Treasury Note - called risk free because if they can't pay, your money is worthless!)

b) A CD at a South American bank paying in their local currency.

c) A stock in a company that has a secure stream of income from a long term contract customer.

d) A stock in a company that has an interesting business plan but no real operations as of yet (as NY Lotto says "A Dollar and A Dream")

And in addition, how would the recent huge fluctuations in the stock market affect your original response to the initial part of the question?

Thanks is advance for your time and consideration.

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Solution Summary

This explains the discount rates and relationship with personal investment style and risk levels

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DISCOUNT RATES
I need assistance with the following assignment:

Discount rates will vary based upon your own personal level of risk tolerance. For example, I might be willing to buy a risky stock if I think I'll earn 10% while my wife would need at least 20% before she'd consider it. What's your discount rate for the following types of equities? And how did you determine that rate?

The discount rate is the expected return derived from a particular financial instrument; This is determined by laying down standards or benchmark. The rates are as follows:

a) A risk free equity (a US Treasury Note - ...

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