6. The use of an unadjusted WACC for selecting a project is appropriate if the risk of the project is equivalent to the risk of the firm.

TRUE or FALSE

7. If the project IRR and beta coordinates plot below the SML, then the project should be rejected.

TRUE or FALSE

8. Correlation between two assets is the covariance between the two assets times the standard deviations of the two assets.

TRUE or FALSE

9. The variance and the weight of the risky asset drive the standard deviation of a portfolio containing a risky and riskless asset.

TRUE or FALSE

10. In a world with taxes and financial distress costs, Modigliani and Miller find that debt use can increase firm value.

TRUE or FALSE