I. T A company's stock and bond returns are perfectly positively correlated. 2. TF A portfolio of two stocks always has lower standard deviation of returns than each stock individually 3. T F Between two bonds issued by the same company, if one has longer duration than another, then it will always have higher sensitivity to interest rates. 4. T F A risky stock needs to have higher expected return than the risk-free rate. 5. TF I If you delay paying your supplier, this would reduce your net working capital. T higher Sharpe ratio than the market portfolio. 6. F Even if CAPM is true, in equilibrium, there can be risky portfolios with 7. TF Implementing better corporate governance practices would be a source of agency cost. TF A bond is a discount bond if its YTM is higher than its coupon rate 8. 9. T CAPM proposes a linear relationship between a stock's actual return and F its market risk. 10. T F If CAPM is true, high book-to-market stocks must have higher beta than low book-to-market stocks