[Instruction: Begin by answering whether the following statement is true or false. If you think a statement is false, explain your answer in ONE or TWO SENTENCES. If you think a statement is true, no explanation is required.]

1. If the market is efficient, an investment in any risky security will yield the same Treynor ratio.

2. If the CAPM holds, the arithmetic average beta of all the assets in the market is 1.

3.Framing bias means that investors are too slow in updating their beliefs in response to evidence.