1. What is the most significant advantage of incorporating a business versus operating it as a partnership?

1) Access to bailout money from the federal government

2) Limited financial liability of the shareholders

3) Exemption from federal taxes

4) Charitable immunity

2. Which of the following describes a project being considered by a firm that plots above the security market line.

A. The project has a positive net present value.

B. The project's beta is too high.

C. The project has high project risk.

D. The project has a negative net present value.

E. Both C and D

2. Over the past 4 years an investment returned 18%, 9%, 12%, and 15%. What is the standard deviation of returns?