True or False, if False, why?

17. If we have a bond and an option and we can model their future values, we can also determine the price of any other asset that has payoffs in those states of the world. 2

18. Assume we are short one stock and want to hedge buy trading in a call option with a delta of 0.5. We need to buy 0.5 options.

19. The portfolio diversification effect requires that at least some assets are negatively correlated.

20. It is possible for the risk/return profile of individual assets to lie outside (i.e. left of) the efficient frontier.