1. If you hold a large well-diversified portfolio, which of the following events would have the greatest impact on your investment?

The central bank unexpectedly cut the short-term interest rate by 0.25%

The CEO of one of the firms you have invested in has suddenly died

The new schedule of corporate tax rates, which the government announced last year, came into effect last month

One of your investments is a mining company that continues to be plagued by an ongoing labor dispute

2. Which of the following is NOT capital budgeting decision (investment decision)?

Intel decides to spend $1 billion to develop a new microprocessor.

Volkswagen borrows 350 million Euros (350 million) from Deutsche Bank.

BP constructs a pipeline to bring natural gas onshore from a production platform in the Gulf of Mexico.

Budweiser spends 200 million to launch a new brand of beer in European markets.