please help me answer Q-1 AND Q-2 questions. thank you so much!! IT'S COMPLETED QUESTION...
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please help me answer Q-1 AND Q-2 questions. thank you so much!! IT'S COMPLETED QUESTION
Q1-1. Under Efficient Portfolio Theory, which of the following statements are TRUE? I. When there is no risk-free asset in an economy, investors may choose different risky portfolios based on their risk-preference. II. When there is risk-free asset, investors will invest in the same weight on the risk-free asset and the market portfolio. III. When there is risk-free asset, Sharpe ratio of investors' portfolios may differ. A. I only B. II only C. I and II only D. II and III only E. None of the above Q1-2. Under CAPM, which of the following statements are TRUE? I. If an asset (or portfolio) does not have any systematic risk, it has no risk at all. II. If an asset (or portfolio) has a correlation coefficient of 1 with the market portfolio, it must have a beta of 1. III. If an asset (or portfolio) has a negative correlation coefficient with the market portfolio, it must have a negative beta as well. IV. If you choose any two assets (or portfolios) from SML and construct a new portfolio, it should also be on SML as well. A. I and III only B. II and III only C. III and IV only D. I, III and IV only E. II, III and IV only
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