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Which of the following is true if the market is in equilibrium? Security returns are all equal All stocks are held in direct proportion to

  1. Which of the following is true if the market is in equilibrium?
  1. Security returns are all equal
  2. All stocks are held in direct proportion to their market cap
  3. The ratio of a stocks contribution the markets risk premium divided by its contribution to market variance is the same for all stocks
  4. The ratio of a stocks contribution the markets risk premium divided by its contribution to market variance is equal to the market risk premium divided by the market variance.
  5. The sum of each stocks contribution to market risk premium equals the market risk premium
  6. The sum of each stocks contribution to market variance equals the market variance.
  7. The market portfolio lies on the security market line
  8. The expected alpha of any portfolio on the security market line is zero
  9. Its NOT possible for a portfolio of stocks to have a higher return than that of the market portfolio.
  10. Its NOT possible for a portfolio of stocks to have a lower return than that of the market portfolio.

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