1.Explain why each of the five independent statements below is false. A good explanation should be between two and four sentences for each part.

If the market is efficient, it is unlikely that an investor will be able to double his or her money over the next 10 to 12 years.

A mutual fund manager is concerned that the value of a portfolio of Treasury Bonds (average maturity = 15 years) will decrease as interest rates increase over the next three months.To construct thebesthedge over this three-month period he should sell T-Bill futures contracts.

Stock A has a Beta of 1.75, Stock B has a Beta of 0.60.These betas make sense if Company A (Stock A) manufactures and sells prescription medications and Company B (Stock B) builds luxury homes.

If the stock market is semi-strong form efficient, historical earnings information - and other public accounting information - cannot help an analyst explain where a stock is currently trading within its 52 week range. (i.e., why the stock price is at the high end, the low end, or the middle of this range).

Purchasing a S&P 500 futures contract can be either an incredibly risky proposition or a very low risk investment.Unfortunately, it is impossible to differentiate between when the use of an S&P 500 futures contracts is risky and when it is not.