TRUE OR FALSE

1. The needed rate of return is determined by the following factors: a. The actual risk-free rate, b. The predicted rate of inflation, c. and liquidity risk. 2. In a comparison of similar schemes, a high Treynor Ratio indicates higher risk-adjusted performance. 3. Longer-term securities change in value more than shorter-term assets. 4. Standard deviation requires two sets of data, whereas beta requires just one. 5. Value funds (Stocks and stock funds that pay dividends) are riskier than index funds