Issuing which of the following increases a firm's risk of bankruptcy?

• Stock
• Bonds

Stock only

Bonds only

Both Stock and Bonds

Neither

What is considered to be a risk-free asset?

U.S. Treasury Bills

Bitcoin

Stocks of large utility companies

Bonds issued by the State of California

Real Estate along the San Andreas Fault

True or False: You should still expect to be compensated for risk that you could otherwise eliminate through diversification.

False

True