1. Which of the following is added to the risk-free rate to reflect the likelihood that the issuer will default?

1. Inflation risk premium

2. Default risk premium

3. Liquidity premium

4. Maturity risk premium

5. None of the above

2. As facility projects can often lead to non-normal cash flows, it is recommended that which of the following be used when developing a capital budget?

1. Payback period

2. Discounted payback period

3. Net present value

4. Internal rate of return

5. Modified internal rate of return

3. Which of the following is sold by either a government agency or a non-profit corporation set up to build a facility?

1. Certificate of participation

2. Tax increment financing

3. Contractually obligated income

4. Asset backed securities

5. None of the above

4. True or False: The sale of naming rights has little to do with getting a new stadium financed and completed.

1. True

2. False