Answer Happy

1) TRUE OR FALSE. The variance of the return of an equally weighted portfolio of two assets is always less than the variance of either individual asset return. 2) TRUE OR FALSE-A portfolio consists of $500 of stock A, 51000 of stock B, $1500 in stock C and a short position of $1000 in the risk free asset. Another portfolio consists of $100 of stock A, $200 in stock B and $300 of stock C and no holdings of the risk- free asset. THE MUTUAL FUND THEOREM IS VIOLATED IN THIS EXAMPLE? 3) TRUE OR FALSE- If the yield curve Is upwards sloping the value of a bond portfolio increases over time. 4) TRUE OR FALSE- suppose the tangency portfolio of risky asset has an expected return of 12% with a standard deviation of 20%. The risk-free rate is 4%. If you are a mean variance optimising Investor with risk aversion coefficient A-2, your optimal portfolio consists of 100% risky assets. 5) TRUE OR FALSE- According to CAPM, a positive-alpha shock is under-priced 6) TRUE OR FALSE- the efficient market hypothesis implies that nobody should be able to consistently make money in the stock market 7) TRUE OR FALSE- A company's present value of growth opportunities is always positive, since investors value the prospect of dividend growth. 8) TRUE OR FALSE - Consider two treasury bonds. The first has a coupon of 2% and a maturity of 10years. The second also has a coupon of 2% but matures for Syears. The price of the first bond is more sensitive to changes in the yield than the price of the second bond 9)