1. Which one of the following companies is most likely to be exposed to the least amount of macro risk? a. A producer of dog biscuits b. A regional airline c. A major commercial bank d. A machine tool manufacturer 2. Treasury bonds have provided a higher historical return than Treasury bills, which can be attributed to their: a. greater default risk. b. higher level of specific risk. c. greater exposure to interest rate risk. d. illiquidity. 3. Which one of these is a specific risk? a. Revision to the corporate tax laws. b. Inflation increase of 2.3%. '-'. c. Deterioration in the overaieco %mic outlook. d. A fire at the company's main factory. 4. The incremental risk to a portfolio from adding another stock: is always greater than the average portfolio risk. is always less than the average portfolio risk. is always positive. may be either positive or negative. a. b. c. d. 5. Over a 20-year period an investment of $1,000 in common stocks returned an average of 11% in nominal terms and 4% in real terms, which of the following is a true statement about the portfolio value at the end of 20 years: a. The portfolio is worth $1,800 in real terms b. The portfolio is worth $3,679.19 in nominal terms. c. The portfolio is worth $2,191.12 in real terms d. The portfolio is worth $9,062.31 in nominal terms