Which of the following statement is incorrect? The risk/return tradeoff states that financial decisions that subject stockholders to more risk must offer a higher expected return. O Most of the answers are correct. O Nondiversifiable risk arises due to market risk factors such as the inflation and real gross domestic product changes. The S&P 500 stock market index is often used as a proxy for a specific form in any industry. O A correlation coefficient value of zero indicates that the variables' values are not related at all and this is known as statistical independence. Which of the following statement is correct? O All the answers are incorrect. O If the number of periods increases, present value decreases. each of the unspecified time periods are known as annuities O Annuities in which the cash flows occur at the end due. O With an amortized loan, after the last payment is made, still the remaining interest on interest and simple interest on principal on the loan have to be paid. O Annuities in which the cash flows occur at the end each of the unspecified time periods are known as annuities due. Which of the following statement is incorrect? O Future value has a negative relationship with the interest rate and with the number of periods. O Most of the answers are correct. Annuities are a series of equal cash flows. O With an amortized loan, after the last payment is made, all the interest and principal on the loan have been paid. O Money we owe is less burdensome if it is to be paid in the future rather than now. Which of the following statement is correct? O Junk bonds have a bond rating above investment grade. O All the answers are incorrect. An domestic bond is a bond sold in a country other than the country of the corporate headquarters of the issuing company. O A putable bond is like the convertible bond described earlier in the chapter except that the positions of the common stock holders and the preferred stock holders with respect to the option have been reversed. The indenture is the contract between the issuing corporation and the band's purchaser