pls ans all if not DO NOT take

1.

According to the CAPM, which of the following is FALSE:

		All securities in the market portfolio are held in proportion to their market values.
		All investors who take on risk will hold the identical portfolios of risky assets.
		A stock with high systematic risk, measured as beta, will have high expected returns in equilibrium.
		Investors will choose to hold the individual stock with the highest Sharpe Ratio.
		None of the above

2.

1. Consider the CAPM. The expected return on the market is 10%. The expected return on a stock with a beta of 1.5 is 13%. What is the risk-free rate?

   		2%
   		3%
   		4%
   		5%
   		Not enough information

   3.

   Consider a single index model, the alpha of a stock is 2%, the beta is 1.2, the risk-free rate is 2%, and the market excess return is 15%. What is the idiosyncratic component of return given an actual return of 18%?

   		2%
   		0
   		-2%
   		-4%
   		Not enough information

4.

Consider the single index model, which of the following statements are FALSE? [I] ( _i) must always equal zero [II] must always equal zero [III] E( _i) must always equal zero

		I only
		III only
		II and III only
		I and II only
		I, II, and III