E True\\False questions (10 points} Answer True or False to each question. Each is worth 1 point. 1. The bond provides an annual dividend while the stock does not guarantee any annual income. 2. In the event of the company's bankruptcy, the preferred shareholders have priority when reimbursing the debts 60mpared to the bondholders. 3. To realize the promised return on a bond at the time of its purchase, it is necessary to hold the bond until its maturity and to reinvest the coupons at this same rate of return. 4. The covariance between two variables is between +1 and -1. 5. An effective interest rate is capitalized only once per period, while a nominal interest rate can be capitalized multiple times per period. 6. In the case of discounting cash ows that grow at a constant rate (g) in perpetuity, the growth rate (g) must be less than the discount rate (r). 7. The variance of a portfolio composed of two securities reaches its maximum at a zero correlation rate between the two securities. 8. For a given nominal interest rate, the more the number of capitalizations increases, the higher the effective rate. 9. NPV is based on the principle that a dollar today is worth less than a dollar tomorrow. 10. The NPV and the updated payback always give the same recommendation on whether to accept or reject the project