1. what efficiency implies is that the price a firm will obtain when it sells a share of its stock is a "fair" price in the sense that it reflects the value of that stock given the information aviliable about the firm? True or False?

2. The security market line (SML) is a negatively sloped curvilinear line displaying the relationship between expected return and beta? True or False?

3. The return on your investment will usually have two components. first you may receive some cash directly while you own the investment. This is called the income component of you return. Second, the value of the asset you purchase will often change. In this case, you have a capital gain or capital loss on your investment. True or False?

4. Because the government can always raise taxes to pay its bills, the debt represented =by T-bills virtually free of any default risk over its short life. thus we call the rate of return on such debt the "risk free return" and we use it as a kind of benchmark. True or False?

5. The efficient markets hypothesis (EMH) asserts that well organized capital markets such as the NYSE are efficient markets. True or False?