a.Assuming the Capital Asset Pricing Model (CAPM) holds, securities on the Capital Market Line (CML) can only be portfolios of two assets: the market portfolio and the risk-free asset. \ \ b.Dollar weighted returns are adjusted for risk as the returns account for the timing and magnitude of cash inflows and outflows in investments, while time-weighted returns are not risk-adjusted. \ \ c.Performance attribution is an analysis conducted to assess a portfolio managers skills in asset allocation and security selection. \ \ d.Impacted by the recent pessimistic performance of the stock market your friend changes his prior belief to consider selling his investments, a behaviour reflecting conservatism bias. \ \ e.Including stock options in your portfolio may decrease the portfolios systematic risk but not its non-systematic risk, as non-systematic risk can only be reduced through diversification.\