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True or False The security market line shows how the expected rate of return depends on beta. 2. According to the CAPM, a stock's expected

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  1. The security market line shows how the expected rate of return depends on beta.

2. According to the CAPM, a stock's expected return is positively related to its beta

3. To a company, the cost of interest payments on its bonds is reduced by the amount of tax savings generated by that interest.

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