A one-month American put option can be worth more than a three-month European put option on the same underlying share and same exercise price. (Your answer must begin with True or False followed by your explanation.

Assuming other factors are unchanged, the value of a call option will decrease as interest rates increase. (Your answer must begin with True or False followed by your explanation.)

The CEO of a gold producing firm that will produce 100 tons of gold this calendar year has suggested to her financial risk manager that the firm should sell 120 tons of gold today in the forward market to hedge the firms position. The financial risk manager informs the CEO that this is the same as speculating. (Your answer must begin with True or False followed by your explanation.)

If Firm X has a beta of 0.8 and Firm Y has a beta of 0.6 it is still possible to form a portfolio of firms X and Y that has the same systematic risk and expected return attributes of the market portfolio. (No calculations required.) (Your answer must begin with True or False followed by your explanation.)

According to the CAPM, an investors optimal portfolio of risky investments depends on how conservative or aggressive that investor is. (Your answer must begin with True or False followed by your explanation.)