1. (25pts) (1) Consider the statement "The higher the risk of an asset, the higher risk premium it should offer". Is it true or false? Please explain. (2) Consider the statement "A company with growth in dividends has positive PVGO". Is it true or false? Please explain. (3) Suppose you expect that the market will perform well in the coming year. Which industry do you invest, technology or utilities? Please explain. (4) Given any positive number b, can you construct a portfolio using the index fund and the risk-free asset with its beta equal to b? Suppose you can borrow at the risk-free rate. Hint: The index fund tries to provide a close approximation of the market portfolio and its beta can be thought as 1 . (5) At Litchfield Chemical Corp., a director of the company said that the use of dividend discount models by investors is "proof' that the higher dividend, the higher the stock price. Using the constant-growth dividend discount model as a basis of reference, evaluate the director's statement