Part 1. Multiple choice questions (50 points, 5 points each). Choose the best answer. No need to write down your reasoning process. 1. The following statements concern the Fama-French three factor model. Which of the following state- ments is true? Choose the best answer! (a) According to the Fama-French three factor model, stocks of the small size firms should have higher required returns (b) According to the Fama-French three factor model, stocks with low liquidity should have higher required returns (c) According to the Fama-French three factor model, stocks of the firms with high book-to-market ratio should have higher required returns (d) According to the Fama-French three factor model, stock with high standard deviation should have higher required returns (e) a. and c. are both true