Which of the following portfolios have the least risk? (no answer) A portfolio of long term government bonds Standard \& Poor's composite index A portfolio of treasury bills Portfolio of common stocks of small firms 2. Long-term government bonds have: Which of the following investment rules does not use the time value of the money concept? (no answer) Payback period IRR NPV All of the above use the time value concept 4. If the net present value of project A is +$100, and of project B is +$50, then the net present value of the combined project is: (no answer) The disadvantages of the (no answer) book rate of return method is/are: It uses net income instead of cash flows The pattern of income has no impact on the book rate of return 6. The choice between debt and equity financing is called the capital structure decision None of the above the financing decision What is a corporation? Please, mark the incorrect answer! (no answer) In the view of the law, it is a legal person that is owned by its bondholders. A corporation is a legal entity. As a legal person, the corporation can make contracts, carry on a business, borrow or lend money, and sue or be used. One corporation can make a takeover bid for another and then merge the two businesses. What does it mean CFO? (no answer) Chief financial officer 9. Conflicts between shareholders' and managers' objectives create agency problems. What does (4b) mean for a financial manager? (no answer) Cash generated by operations Cash raised from investors Cash returned to investors Cash reinvested