1. Applying the CAPM
   1. Show graphically (in return-standard deviation space) how some investors may be borrowers, while others may be lenders in the capital markets under CAPM.
   2. Show how the existence of differences between the borrowing and lending rates may affect both borrowers and lenders. Assume that the borrowing rate is higher than the lending rate.
   3. Show and explain how the securities market line (SML) plots the relationship between risk and return.
   4. Explain how a security may be undervalued or overvalued based on the SML.
   5. What are some of the criticisms often cited when implementing the CAPM? Do you think the CAPM should be used by practitioners when assessing an assets risk/return? Why?