Question 14 of 25 You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increase the calculated value of the investment? a. The cash flows are in the form of a deferred annuity, and they total to $100,000. You learn that the annuity lasts for 10 years rather than 5 years, hence that each payment is for $10,000 rather than for $20,000. O b. The discount rate increases. O O c. The riskiness of the investment's cash flows increases. d. The total amount of cash flows remains the same, but more of the cash flows are received in the later years and less are received in the earlier years. e. The discount rate decreases. O 0 Icon Key Question 14 of 25 Question 17 of 25 o Which of the following statements is CORRECT? 1 a. It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock. O b. An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks. O c. The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio d. Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount. e. An investor can eliminate virtually all market risk if he or she holds a very large and well diversified portfolio of stocks. . O . O 0-Icon Key Question 17 of 25 Question 18 of 25 Which of the following statements is CORRECT? a. All else equal, high-coupon bonds have less reinvestment risk than low-coupon bonds. O b. All else equal, long-term bonds have less price risk than short-term bonds. c. All else equal, low-coupon bonds have less price risk than high-coupon bonds. d. All else equal, short-term bonds have less reinvestment risk than long-term bonds. e. All else equal, long-term bonds have less reinvestment risk than short-term bonds. Olon Key Question 1 of 25