1. Which of the following statements related to risk and return is FALSE?
a. the standard deviation is a statistical measure of the tendency of two or more variables to move together
b. the risk premium on stock X is the difference between the expected rate of return on stock X and the rate of return available on a risk-free asset
c. in the CAPM, the expected rate of return for a firm with a Beta of 1 will be equal to the expected rate of return on the market portfolio
d. the expected return on a portfolio is simply the weighted-average expected return of the individual assets in the portfolio, with the weights being the fraction of total portfolio value invested in each asset
2. Which of the following is typically classified as a current asset?
a. retained earnings b. accumulated depreciation c. inventory d. property, plant, and equipment