5. Consider an investor who hires a broker to buy a corporate bond in an over-the-counter market. Possibly, the broker might not connect the investor to the best price available in the market.

True

False

6. A portfolio allocates wA proportion of its funds in stock A and wB proportion in stock B. The standard deviations of these stock returns are A and B, respectively. Then, the portfolio standard deviation, P, should always satisfy P

True

False

7. An investor with a risk-aversion coefficient of 5 finds (P,E(rP))=(18%,12%) as the optimal risky portfolio. For another investor with a risk-aversion coefficient of 10, the optimal risky portfolio should have a standard deviation of 9% or lower.

True

False