8/ Analysis of returns using the SML would indicate that:

• as betas increase, the expected return decreases.

• the required return for all securities can be expressed as the risk free rate minus a premium for risk.

• if beta is positive a negative correlation exists between market risk and the risk free rate.

• if the beta is 2.0, twice the market risk premium must be earned

  10/ The tool used to evaluate the present value of future cash flows is:

• beta.

• cost of capital.

• growth rate

• NOI.