"If returns from a particular investment are ""bell-shaped"" then knowing the mean and variance of those returns will approximately describe their distribution" True False . 10 points

Question 2 We should expect firms with higher betas to have better returns True False . 10 points Question 3

The market factor should be linearly related to expected returns to diversified portfolios but not individual stocks True False . 10 points Question

4 A firm's beta is estimated by comparing returns to the market portfolio to returns of the stock True False . 10 points Question

5 If I find the minimum variance combination of two stocks, adding a third stock with a higher standard deviation that both the originial stocks will make the portfolio standard deviation increase True False . 10 points

Question 6 The security market line defines expected returns for diversified portfolios True False . 10 points

Question 7 If I buy equal amounts of a 1 beta stock and a 2 beta stock, my portfolio will have a 1.5 beta True False . 10 points

Question 8 A firm with a larger beta will always have a higher standard deviation of returns than a firm with a lower beta True False