1. Currency options differ from currency futures because they have:
a) daily marking to market and basis risk
b) linear payoffs and no option price or premium
c) nonlinear payoffs and option price or premium
2. If the average rate of return on the market increases over time, then:
a. the risk free rate of return has to be decreasing over time.
b. the beta for each firm will correspondingly decrease over time
c. the risk premium of the market is increasing
d. the CAPM will be less reliable as a predictor of investment returns