o O 13. The CAPM assumes that there are no transaction costs when buying or selling. 14. If the RFR is 5% and the market return is 13%, the expected return for a stock with a beta of 2 is 21%. 15. If a stock improves from $10 to $11 when its expected return is 13%, the stock's alpha equals 2%. 16. A negative alpha implies that the stock is overvalued. O o o o o o o o O 17. If a stock has an expected return of 10% when the RFR is 2% and the market return is 10%, beta must be 1.0. 18. The market risk premium in the previous question is 10%. O 19. In an efficient market, all assets would plot on the SML. O