1. The cost of internally generated equity is the cost of preferred equity. A. the same as B. less than C. greater than D. none of the above because more information would be needed. Which is the most important cost in finance? A. accounting B. historical C. opportunity D. sunk 3. Finding the present value of future cash flows is called and finding the future value of present cash flows is called A. discounting, compounding B. capital budgeting, short-term budgeting C. financial ratio analysis, financial statement analysis D. none of the above 4. An uncollateralized bond would be called which of the following? A. equipment trust certificate B. mortgage bond C. bill D. debenture E. callable bond 5. Which statement is true? A. Both systematic and non-systematic risk are reduced through portfolio diversification. B. Individual stocks have no diversifiable risk. C. An investor can buy and sell ETFs at any time. D. When considering mutual funds, an investor should look for ones with high expense ratios. E. The beta of a security is a measure of its diversifiable risk. 6. Liquidity is the with which an asset can be converted into A. ease, cash B. efficiency, cash C. ease, another asset D. efficiency, another asset 7. As the spread between the yield to maturity and the coupon on a bond decreases, the price of the bond approaches... A. $0 B. $100 C. par D. infinity