1.) The risk that refers to the possibility of future cash payments, which bondholders are entitled, be worth less in real terms

	a.	Default risk
	b.	Inflation risk
	c.	Systemic risk
	d.	Unsystematic risk

2.) A major disadvantage of using the Payback Method is:

	a.	Difficult to calculate
	b.	Does not account for the time value of money
	c.	It looks at long-term cash flows rather than short-term cash flows
	d.	It requires the use of complicated formulas