1.(Cash flow/ Profit/ Risk) is inherent in the opportunity cost, or 2. (Coupon rates/ Discount rate/ Opportunity cost), used for finding present values. If uncertainty about potential future cash flows rises, then the 3. (Prime rate/ Stock dividend/ Discount rate/ Bond coupon rate) will also rise. This increasing risk results in a higher 4. (Required return/ Cash flow, Return on Assets/ Return on Equity) and lower 5. (Return on equity/ Bond coupon rate/ Long-term capital structure/ Present value). In the case of stocks and bonds, 6. (Lower risk/ Higher risk) translates into 7. (Lower cash flow/ Lower dividends/ Lower prices).

Choose the right answer from the options for each number.