1. The general measure of a securitys risk and the one that describes its marginal contribution to that securitys return to the standard deviation of the market portfolios return is:
   1. Alpha ()
   2. Beta ()
   3. Sigma ()
   4. Delta
2. True/False. The Security Market Line (SML) is a plot of a securitys beta on the horizontal axis against its expected excess return on the vertical axis.
3. Which of the following is not one of the main implications of the CAPM?
   1. In equilibrium, everyones relative holdings of risky assets are the same as in the market portfolio.
   2. Everyone has perfect or near-perfect information regarding all securities available in the market.
   3. The size of the risk premium of the market portfolio is determined by the risk aversion of investors and the volatility of the return.
   4. The risk premium on any asset is equal to its beta times the risk premium on the market portfolio.
4. A seller of corn will choose to hold onto his corn rather than sell it if and only if:
   1. Cost of Carry < Futures Price Spot Price
   2. Futures Price > Spot Price Cost of Carry
   3. Cost of Carry < Spot Price Futures Price
   4. Futures Price < Spot Price Cost of Carry
5. Under the CAPM, the risk premium on securities only takes into account the ___systematic/unsystematic___ risk of the security.