Which of the following items is a key factor in creating an effective portfolio / diversification stategy resulting in lower risk

a) The assets in the portfolio are negatively correlated

b) The portfolio contains a very small number of assets

c) The portfolio has both production and financial assets

d) All the assets have the same expected return

The rent on a piece of farmland you are renting is $300/acre; interest rate is 5%. Using the capitalization equation, the price you may be willing to pay for the land is:

a) $6,000/ acre

b) $5,000/ acre

c) $4,000/ acre

d) $3,000/ acre

One of the following is NOT a type of risk bearing cost for lenders Credit Risk Liquidity Risk Commodity Based Risk Prepayment Risk One of the following statements about leases is false Leases are beneficial if producers have concerns about their credit capacity Share rents are usually much lower than cash rents since the owner receives a premium for the higher risk Cash leases are the easiest to predict and include in enterprise budgets Landowners and tenant share the risk of variability in yields and prices for share leases