1. The total return on a security is made up of two components: the capital gains component and the price appreciation component.

True or False

2. In general, the longer the term of an investment the lower the risk premium will be.

True or False

3.Historical information about capital markets is useful for drawing conclusions about the relationship between risk and return.

True or False

4. Common stock sold and replaced with Treasury bills would increase a portfolio's systematic risk.

True or False

The risk premium increases as the non-diversifiable risk increases.