T/F
1. In response to the same external forces, the return on one investment may increase while the return on another investment may decrease.
2. Investments with lower standard deviations can be expected to produce higher rate or return.
3. Adding stocks with higher standard deviations to a portfolio will necessarily increase the portfolio’s risk.
4. An expansionary monetary policy will cause an appreciation of the domestic currency.
5. According to the Purchasing Power Parity, forward exchange rate adjusts perfectly to inflation differentials between two countries.