(A) Are the following statements true or false? Briefly explain your answer.

i) "The duration of a zero-coupon bond equals its time to maturity."

ii) Holding maturity constant, a bond's duration is lower when the coupon rate is higher"

(B) "The CAPM implies that rational investors should hold the market portfolio together with the risk free asset. As the market portfolio has a beta of 1, an equally good alternative would be for investors to hold instead just one stock in a large, public company with a beta of exactly 1." True or false? Briefly explain your answer.

(C) "It is not possible to forecast stock returns in an efficient market.