PARTI: For each of the following statements, indicate your response by writing "T" or "F", please explain if False. (2.5'*10=25) 1) An efficient An efficient portfolio maximizes the rate of return without consideration of risk. Answer: dividends and stock splits both increase the number of shares but add nothing to the value of the company. Answer: 3) Negatively correlated assets reduce risk more than positively correlated assets. Answer: 4) For most stocks, the returns from dividend income far exceeds the return from capital gains. Answer: 5) Coefficients of correlation range from a maximum of 10 to a minimum of 10 Answer: 6) A beta of 0.5 means that a stock is half as risky the overall market. Answer: 7) Stocks which perform well in a faltering economy are called defensive stocks. Answer: 8) Portfolios located on the efficient frontier are preferable to all other portfolios in the feasible set. Answer: 9) A bond has a coupon rate of 6%, matures in 5 years, and currently sells for $1,000 (par value). Therefore, the yield to maturity is also 6%. Answer: 10) If a bond's yield to maturity is lower than its coupon rate, the bond will sell at a discount