1.True or False If two investments offer the same expected return, mostinvestors would prefer the one with higher variance. 2. Trueor False Portfolios that offer thehighest expected return for a given variance or standard deviation are known asefficient portfolios. 3 True or False Investors are mainly concerned with thoserisks that can be eliminated through diversification. 4. True or False Beta measures the marginal contribution of astock to the risk of a well-diversified portfolio. 5 True or False According to CAPM, all investments plot alongthe security market line. 6. True or False Tests of CAPM haveconfirmed that Capital Asset Pricing Model holds good under allcircumstances. 7 True or False Both the CAPM and the APT stress thatexpected return is not affected by unique, nonsystematic, or firm specificrisk. 8.True or False All portfolios on theefficient frontier are efficient portfolios. 9 True or False When we introduceborrowing and lending at the risk-free rate with the market portfolio much ofthe efficient frontier is now inefficient. 10 True or False The Market portfolio is a risky portfolio thathas the average risk for the economy. The beta of this portfolio is one and wetypically use a market-index to represent this portfolio in practice.
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