True or False (2 pts. each) Identify whether each statement is true (T) or false (F). Please write neatly 1. The capital asset pricing model is used to determine hurdle rates for capital projects in corporations. 2. When investors are faced with a market portfolio and the option to borrow or lend at the risk-free rate, they will increase the riskiness of their complete portfolio by borrowing at the risk-free rate to invest more than 100% in the risky portfolio. Investors can reduce risk in their portfolio by investing in securities that have low correlation. 4. Investors who are risk-takers will hold a higher proportion of their complete portfolio in the securities portfolio 5. A security with a high beta is considered a cyclical security 6. The Federal Reserve announces that it is concerned about inflation and will adopt a policy of higher interest rates. This is a systematic risk factor. 7. When the strong form of the efficient market hypothesis exists, investors trading on insider information can earn abnormal profits. 8. If you invest in the market portfolio, you can expect low volatility in returns. 9. The efficient frontier of risky assets is the graphical representation of the set of portfolios that maximizes return for a given level of beta. 10. When the alphas on two portfolios are zero, an arbitrage opportunity exists