20. Currently the stock price of GTI is $59. The company currently has the EPS of $2.2 and the cost of equity of 11%. What is the present value of its growth opportunities (PVGO)?

A) PVGO <= $25

B) $25

C) $30

D) $35 < PVGO <= $40

E $40 < PVGO

21. A start-up firm has the EPS of $0.05. Analysts are trying to value the stock. If there is a firm that has very similar cash flows in the future and has a P/E ratio of 75. Then, what is the stock price of the start-up firm using the P/E multiple as a valuation method.

A) P0<= $2.5

B) $2.5 < P0 <= $3.0

C) $3.0 < P0 <= $3.5

D) $3.5 < P0 <= $4.0 < P0

24. Which of the followings is not compatible with the others ?

I. The CAPM

II. Mutual fund theorem

III. Zero beta

IV. Passive portfolio management

A) I

B) II

C) III

D) IV

E) None of them

26. Consider a stock with the expected return of 22% and the standard deviation of 18%. What is the worst return in the next period that may happen with 95% confidence interval under the normal distribution?

A) Less than -10%

B) Higher than -10% but less than -8%

C) Higher than -8% but less than -6%

D) Higher than -6%

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