19. The risk premium compensates investors for:

A. Foreign exchange.

B. Changing interest rates.

C. Exposure to inflation.

D.Assuming the risks of the investment.

25. common pattern for individuals is to:

A. Be surplus-budget units when young and balanced-budget units when older.

B. Be balanced-budget units when young and deficit budget units when older.

C. Be surplus-budget units when young and deficit-budget units when older.

D. Be deficit-budget units when young and surplus-budget units when older.

26. in direct transfer of funds, the parties:

A. Use a financial intermediary.

B. Use a broker.

C. Use the government.

D. Know each other.

32. the relationship between risk and return in financial markets can be summarized by saying:

A. The more risk, the more the actual return an investor will receive.

B. The more risk, the greater the return demanded by investors.

C. The more risk, the less the actual return an investor will receive.

D. The more risk, the less the return demanded by investors.