All the major world markets are considered efficient in a


True/False

1. All the major world markets are considered efficient.

2. In a well-diversified portfolio, company specific risks vanish and the total risk of the portfolio reduces to its market risk.

3. Deviations from purchasing power parity can result in real foreign currency risk.

4. Securities that have same risk characteristics, in an integrated world markets, should have similar expected returns.

 

5. An assessment of the long-term risk premiums according to the ICAPM is usually undertaken only for asset classes or national markets, not for individual securities.

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Financial Management: All the major world markets are considered efficient in a
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