True or False:

1. XXX Corporations stock has a return of 30% and ZZZ Corporations stock has a return of 10%. Therefore XXX Corporations stock is the better investment.

2. Risky stocks will normally plot above the SML and less risky stocks will normally plot below it.

3. The equation for the SML is called the CAPM.

4. Statistical studies of the stock market have shown the Beta for U.S. Treasury Bills is 1.0.

5. If the Texaco Corp. has a labor strike, this is an example of Beta risk.