1.

Diversification will normally reduce the riskiness of a portfolio of stocks.

True

False

2.

Which of the following statements is CORRECT?

	a.	The present value of a 5-year, $250 ordinary annuity will exceed the present value of a 5-year, $250 annuity due.
	b.	The proportion of the payment that goes toward interest on a fully amortized loan increases over time.
	c.	If a loan or investment has annual payments with annual interest compounding, then the effective, periodic, and nominal rates of interest will all be different.
	d.	An investment that has a nominal rate of 8% with semiannual payments will have an effective rate that is no less than 8%.