1) Identify each statement as correct or incorrect and shortly explain why. 2) Then for incorrect statements rewrite the statements so they are correct.

A) True/False. It is important to use an accurate, calculated return on the market in the Capital Asset Pricing Model, rather than using a proxy or substitute measure for market return

B) True/False. It is important to hold a portfolio that diversifies away risk, for example, the risk that a firm union might strike or the risk that there might be a shortage of a critical supply.

C) True/False. There is a positive relationship between present value and interest rates.

D) True/False. A semi-annual bond and an annual bond have the same yield to maturity. The semi-annual bond has the lower price.