Question 9 (4 points) Which one of the following is the best example of systematic(market) risk? The Federal Reserve increases interest rates A hurricane hits a tourist destination The price of lumber declines sharply The airline pilots of a firm go on strike Question 10 (4 points) 1. The IRR is defined as: The discount rate that makes the NPV equal to zero The difference between the cost of capital and the present value of the cash flows The discount rate used in the NPV method The discount rate used in the discounted payback period method Question 11 (3 points) 1. A security's beta measures its non-diversifiable (systematic, or market) risk relative to that of most other securities (market portfolio). True False Question 12 (3 points) 1. Investors are mainly concerned with those risks that can be eliminated through diversification. True False