A. Which portfolio combination is more likely to give us more diversification benefit?

		Ford Motor Company & General Motors Company
		Ford Motor Company & Apple Inc.
		Walmart Inc. & Target Corporation
		United Airllines & American Airlines

B. Below are the returns of the long-term US government bonds. Calculate the average and the standard deviation of returns.

Year	Return
1990	7.13%
1991	18.39%
1992	7.79%
1993	15.48%
1994	7.18%
1995	31.67%
1996	0.81%
1997	15.08%
1998	13.52%
1999	8.74%

		15.58% - 8.19%
		16.61% - 0.67%
		15.58% - 0.67%
		16.61% - 8.19%

C. Which statement is most likely correct regarding the riskiness of different investments?

		US Treasury Bills are riskier than long-term US government bonds.
		US Treasury Bills are riskier than small compnay stocks.
		Large company stocks are riskier than small company stocks.
		Large company stocks are riskier than long-term US government bonds.

D. Which statement is correct?

		If the yield to maturity of a bond goes down, its price goes up.
		Bonds always pay coupons annually.
		A premium bond has a coupon rate lower than its yield to maturity.
		Dividends on stocks either is constant or grows at a constant rate.