QUESTION BELOW

4. Which of following is NOT true? A. If the CAPM holds, and stock A has higher expected return than stock B, then A must have higher market beta than B. B. If the CAPM holds, the market portfolio must have higher expected return than the riskfree rate. C. The CAPM states that the tangent portfolio is identical to the market portfolio. D. If CAPM holds, then the market portfolio is on the CML. E. If the CAPM does not hold, then the CML does not exist. 5. Which of the following is NOT true? A. A 5year zerocoupon treasury note must have higher duration than a 3-year STRIPS. B. The yield-to-maturity of a bond cannot be higher than the highest spot rate in the yield curve. C. If two treasury bonds have the same maturity, face value and compounding frequency, then the one with the higher coupon rate should be traded at a higher price. D. If a bond has safe cash ows, then it's a riskfree bond so that it's not subject to interest rate risks. E. If the market is efcient, then the present value of the cash ows of a bond is the same as its trading price. 6. Which of the following is true? A. Since depreciation is not a real cash ow, it's irrelevant to capital budgeting decisions. B. If the IRR of project A is higher than the IRR of project B, and A and B are mutually exclusive, then the manager should pick A. C. The NPV rule does not apply if the rm faces nancing constraints. D. If the IRR rule agrees With the payback rule, then the manager doesn't need to consider NPV any more.. E. If NPV of the project is negative, then the manager should not undertake the project even when the rm is not nancially constrained