1.As the riskiness of a stock increases, the stock price

a) increases

b)first rises then fall

c) decreases

d) is not affected

2) Which one of the following will increase the Return on Equity (ROE)?

a) increase in the corporate tax rate

b) increase in variable cost per unit

c) decrease in net sales

d) issuance of debt to purchase equipment

e) decrease in fixed costs