14. You believe stock X has a good news that is not currently reflected in to its price yet. Then what is correct in the followings?

A) The expected return of X will be located above the SML (security market line)

B) The expected return of X will be located on the SML

C) The expected return of X will be located below the SML

D) none of a,b andc are correct.

15) Consider the " mean variance analysis" What is the correct in the following?

A) The minimum variance portfolio is the optimal risk portfolio

B) Sharpe ratio cannot be determined for the minimum variance portfolio.

C) the Minimum variance portfolio is the market portfolio.

D) the capital allocation line is tangent to the market portfolio.

17) If the expected rate of return of a stock is lower than the required rate of return, then ehat is false in the following?

A) The stock market is not in equilibrium

B) Relevant information is not fully reflected

C) The stock is underpriced

D) the stock price will change soon.

18) Which of the following combinations can explain the logical inconsistancy in the CAPM?

A) Passive portfolio strategy and the efficiency of the market portfolio

B) Active portfolio Strategy and the minimum variance of the portfolio

C) Passive portfolio strategy and the capital allocation line

D) Active portfolio strategy and the investment opportunity set.