1. (25 points) State if each of the following statements is true or false, and provide your reasoning. (a) According to the CAPM, investors with high required returns (for example, mutual and hedge funds) have to put more weight in their portfolios on riskier assets, such as private equity, foreign investment, alternative asset classes. Hint: Recall the concept of the tangent portfolio. (b) According to the CAPM, stocks with negative beta must trade at higher expected returns than those with a positive beta.