TRUE OR FALSE:

*Limited liability means that, if a corporation goes bankrupt, then shareholders are not obliged to cover creditor losses with their personal property (e.g., house, car). (T/F)

*A corporation compensates shareholders by paying them interest for their contribution to the capital of the firm. (T/F)

*The value of a firm is the sum of the cash flows that is expected to produce and that will be distributed to shareholders and credit-holders. (T/F)

*According to the CAPM, the expected return on a stock with a standard deviation of 40% and a beta of 0.9 will be higher than the expected return of an alternative stock with a standard deviation of 30% and a beta of 1.2. (T/F)

*Decreases in inventory levels increase the cash flow of the firm. (T/F)