Indicate whether the following statements are true or false. a. Investors demand higher expected rates of return on stocks with more variable rates of return. multiple choice 1 True False b . The CAPM...

Indicate whether the following statements are true or false.

a.Investors demand higher expected rates of return on stocks with more variable rates of return.

multiple choice 1

• 
  
  
  

  True

  
  
  
  


• 
  
  
  

  False

  
  
  
  

b. The CAPM predicts that a security with a beta of 0 will offer a zero expected return.

multiple choice 2

• 
  
  
  

  True

  
  
  
  


• 
  
  
  

  False

  
  
  
  

c.An investor who puts $10,000 in Treasury bills and $20,000 in the market portfolio will have a beta of 2.0.

multiple choice 3

• 
  
  
  

  True

  
  
  
  


• 
  
  
  

  False

  
  
  
  

d.Investors demand higher expected rates of return from stocks with returns that are highly exposed to macroeconomic risks.

multiple choice 4

• 
  
  
  

  True

  
  
  
  


• 
  
  
  

  False

  
  
  
  

e.Investors demand higher expected rates of return from stocks with returns that are very sensitive to fluctuations in the stock market.

multiple choice 5

• 
  
  
  

  True

  
  
  
  


• 
  
  
  

  False