1. An increase in inflation should:

A) increase the interest rate on loans

B) decrease the interest rate on loans

C) increase the supply of loanable funds

D) increase the demand for loanable funds

2. The Capital Assets Pricing Model (CAPM) theorizes that the expected return on a portfolio of stocks depends upon the level of systematic risk. The measure of each stock's systematic risk within the portfolio is called its:

A) default risk premium

B) dividend

C) beta

D) interest rate risk