1.

Ted decides to invest some of his savings. The rate of return on which one of the following will provide Bill with a zero risk premium?

Large company stocks

Corporate bonds

Small company stocks

U.S. Treasury bill

2.

Fosters purchased land 15 years ago adjacent to their existing facilities for $50,000 to provide room for them to exapnd their operations in the future. Recently, Miller offered Fosters $1 million dollars for this land, but Fosters decided to turn down the offer and go ahead with their expansion. Which one of the following terms best describes Fosters decision to turn down Miller's $1 million offer?

		Opportunity cost
		Sunk cost
		Irrelevant cost
		Historical cost