1A) If an investors required rate of return is 9.6%, what is the present value of the following cash flows: $7,000 at end of year one, $11,000 at end of year two, $15,000 at end of year three, and $22,000 at the end of year four?

	a.	$41,111.83
	b.	$49,720.00
	c.	$46,234.40
	d.	$42,184.67

1B) At a lovely Sunday picnic you impress your partner by discussing the core concept of risk versus return. You explain that when investments are diversified across different asset classes the overall risk profile of the portfolio is improved. You continue by explaining that there are numerous types of risk. Which of the following are examples of unsystematic risk?

(1) Financial risk (due to the companys excess leverage)

(2) Loss of market share

(3) Interest rate risk

(4) Business-cycle risk

	a.	2 and 4
	b.	2 and 3
	c.	1 and 4
	d.	1 and 2

1C) Which of the following is a money market security?

	a.	Oil and Gas partnership
	b.	Intermediate-term bond mutual fund
	c.	Bank-issued 9-month certificate of deposit
	d.	Equity