8. Which of the following is true about the Security Market Line a. the slope of the line is beta b. all securities in equilibrium lie above the line c. firm specific risk is captured by the equation of the line d. the line shows the tradeoff between systematic and unsystematic risk e. none of the above are true 9. Explain why an investor cannot in theory expect compensation for bearing unsystematic risk. 10. The beta is the measure of risk of a security held by itself. a. True b. False 11. The CML plots: a. return and risk for individual securities b. return and risk for diversified portfolios c. return and risk for small portfolios d. all of the above