Our second time value of money rule states that we must adjust the payment to match the timing of the interest rate.

A$.$ TRUE

B$.$ FALSE

An investor builds a three$-$asset portfolio by purchasing $100$ shares of Alpha Corporation, $200$ shares of Bravo Corporation, and $125$ shares of Charlie Corporation. Based on our portfolio equation, we can definitely say the largest weight in our portfolio will be for Bravo Corporation.

A$.$ TRUE

B$.$ FALSE

If we increase the interest rate, the present value of an investment decreases $($all else equal$).$

A$.$ TRUE

B$.$

FALSE

Supposes that Dunkin announces they expected an increase in the supply chain risk going forward. Our dividend model suggests that investors will want an increased return due to the risk. This will result in a drop in the current stock price.

A$.$ TRUE

B$.$ FALSE

In determining the portfolio risk of a $20$ asset portfolio, the individual variances are more important than the covariance terms.

A$.$ TRUE

B$.$ FALSE

SECTION $2$: TRUE$/$FALSE CURRENT EVENTS $(1\mathrm{.}5$ POINTS EACH$)$

Select answer $A$ if the statement is TRUE. Select answer $B$ if the statement is FALSE.

$15.$ In our current event, AirBnb had a higher market value at the time of their IPO than prior to the COVID pandemic.

A$.$ TRUE

B$.$ FALSE

$16.$ In our current event, Bucees used a cascading strategy to expand the number of large stores throughout the Southeast. They would build a store, then use the profits from the store to finance the next store.