For each statement below, pick True or False: a. According to the CAPM, the market portfolio provides the highest expected return.

• True

• False

b. If we expect GDP to rise next year, we should also expect the stock market to rise next year.

• True

• False

c. In an efficient market, stock price must drop whenever a firm reports an earnings loss.

• True

• False

d. The strong-form efficiency is violated if technical analysis produces consistent abnormal profits.

• True

• False

e. Historically, stocks that performed better in recent months tend to do better in the future.

• True

• False