Question: 1) Identify each statement as correct or incorrect and shortly explain why. 2) Then for incorrect statements rewrite the statements so they are correct. A)

1) Identify each statement as correct or incorrect and shortly explain why. 2) Then for incorrect statements rewrite the statements so they are correct.

A) True/False. It is important to use an accurate, calculated return on the market in the Capital Asset Pricing Model, rather than using a proxy or substitute measure for market return

B) True/False. It is important to hold a portfolio that diversifies away risk, for example, the risk that a firm union might strike or the risk that there might be a shortage of a critical supply.

C) True/False. There is a positive relationship between present value and interest rates.

D) True/False. A semi-annual bond and an annual bond have the same yield to maturity. The semi-annual bond has the lower price.

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