Increasing the number of corporations whose stocks are in your portfolio reduces market risk

Discounting is the process of

a. cutting prices to get rid of surplus stocks. b. finding the present value of future dollars. c. finding the future value of present dollars. d. giving special concessions to special customers.

Interest rates fall and investment falls. Which of the following could explain these changes?

a. The government goes from a surplus to a deficit. b. The government repeals an investment tax credit. c. The government replaces a consumption tax with an income tax. d. None of the above is correct.