True and False:

1. Investment risk and default risk are interchangeable terms and essentially mean the same thing.

2. In projecting financial statements, if the left side of the balance sheet (i.e., the total assets) is less than the right side of the balance sheet, the company will require additional financing.

3. Disadvantages of the Capital Asset Pricing Model include that you are using the past to predict the future and that you have to estimate beta and the market risk premium, which both vary over time.

4. An equity multiplier of 0.5, means that one-half of the book value of the venture's assets was financed by (the book value of) debt financial capital.