21.The CAPM provides a prediction of the relationship that one should observe between the risk of an asset and its expected return. It provides evidence that risk and return are inversely related.

True

False

22.Moving average measures the extent to which a security has outperformed or underperformed the market while relative strength is the average price over a given interval, where the interval is updated as time passes.

True

False

23.Behavioral finance is the intersection of finance and psychology and focuses on systematic irrationalities that appear to oftentimes characterize investment decision-making. BF explores biases such as overconfidence, conservatism, and representativeness or heuristics such as mental accounting and loss aversion.

True

False

24.Liquidity long recognized as an important characteristic that affected asset values - is a priced factor and is defined as the ease and speed with which an asset can be sold at a fair market value. It is oftentimes measured or visualized by bid-ask spread data. Liquidity costs can be incorporated into the CAPM relationship where a perfectly liquid asset would entail no liquidity discount.

True

False