1. True, false or uncertain? Please explain your answer carefully and fully.

a. The duration of a bond maturing at date T is always less than the duration of a zero-coupon bond maturing on the same date.

b. The market price of a share of stock equals the discounted value of the stream of future earnings per share.

c. Growth stocks must have a plowback ratio > 1.

d. If a commercial airline wants to hedge its risk against oil prices, it should go short in oil futures.

e. The value of an American call option is always equal to the value of a European call option.

f. Holding everything else constant, the price of a European call option is increasing with increasing risk-free interest rate.

g. Investors do not get rewarded for bearing idiosyncratic risk.

h. CAPM implies that all risky assets must have a positive risk premium.