Which of the following is true for calculating the future value of multiple cash flows?

• To find the FV of multiple annuities, multiply the sum of all the present values by the interest rate plus time period.

• It is more complex to find the FV of annuities than the FV of irregular cash flows.

• If the cash flows aren't uniform, you must find the FV of each cash flow and then add them together.

• You can only find the FV of multiple cash flows if they all have the same interest rate.

Select the true statement about reinvestment risk.

• It is the risk that a bond's price will fall below its par value.

• A smart investor can eliminate reinvestment risk in addition to interest rate risk.

• Reinvestment risk is inversely related to interest rate risk.

• Callable bonds are less exposed to reinvestment risk.

Which of the following is a disadvantage of bonds for a potential investor?

• Bondholders risk a significant price drop if a large number of bonds are sold at once.

• Some bonds can be redeemed early by the issuer.

• They have less legal protection than stocks.

• They are more likely than stocks to end up valueless if a company goes bankrupt.