1.What is the shape of the security market line? Explain. Draw the graph.

2.What did Fama and French find out about the CAPM? Explain.

3.Instead of Beta, what did Fama and French find that worked better than beta? Explain.

4.Why does CAPM do so badly at predicting returns?

5.Why do we continue to use CAPM despite it not working? You could talk about QWERTY in your answer.