Question: TRUE OR FALSE? o o o o o 9. If the market return is 12% and the risk-free rate is 3%, the market risk premium

TRUE OR FALSE? TRUE OR FALSE? o o o o o 9. If the market

o o o o o 9. If the market return is 12% and the risk-free rate is 3%, the market risk premium must be 9%. 10. The market risk premium will not be the same for all stocks. 11. When drawing the SML, the risk measure is the standard deviation. 12. Stocks plotting below the SML are undervalued 13. The CAPM assumes that there are no transaction costs when buying or selling. n

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