1- Which of the following statements is correct?

Select one:

a. A price-to-book ratio of 1 indicates that the market value of a firm is greater than its book value

b. Where the price-to-earnings ratio is high, the analyst should calculate a terminal value

c. If the price-to-book ratio is less than 1, this indicates management are adding value to the firm

d. A company may have a high return on equity, but low price-earnings ratio, because the growth in book value is low

2- Which of the following statements are correct:

1) Buy-side analysts primarily work for investment firms

2) Sell-side analysts primarily work for brokerage firms

3) Buy-side analysts have an incentive to increase trading volumes in the market

4) Sell-side analysts make recommendations that are relied upon by internal management only

Select one:

a. Items 3 and 4

b. Items 1, 2, 3 and 4

c. Items 1 and 2

d. Items 1, 2 and 4

e. Items 2 and 3

f. Items 1, 2 and 3

3- Hypothetically, if a company's Board and Chief Executive Officer makes a very poor decision which will significantly affect the company's future prospects, we would expect (assuming all things being equal) that the share price would fall relatively less if the Chief Executive Officer resigned promptly, rather than if the Chief Executive Officer stayed on in their position.

Select one:

a. False

b. Cannot tell

c. None of the options are correct

d. True