5. Suppose that the PE ratio for Seminoles, Inc. is 12 and the industry average PE is 8. Now suppose that Seminoles, Inc.'s growth rate in earnings (and dividends) is 20 percent, while the industry average growth rate is 10. Based on the PEG valuation, which of the following statements is correct?

Group of answer choices

a. Seminoles, Inc. is overvalued (relative to the industry average)

b. Seminoles, Inc. is undervalued (relative to the industry average)

c. Seminoles, Inc. is correctly valued (relative to the industry average)

6. Filter tests, which define trading rules based on the percentage movement of a price above or below a certain pre-defined target, are specific tests of what type of market efficiency?

Group of answer choices

a. Weak form

b. Semi-strong form

c. Strong form

d. Informational

7. You have the following information on IBM and Texas Instruments (TI):

Earnings growth Current PE

IBM 15 12.5

TI 10 12.0

Based on a common "rule of thumb", according to the PEG ratio, which of the following statements is correct?

Group of answer choices

a. IBM is a bargain, TI is a bargain

b. IBM is a bargain, TI is overvalued

c. IBM is overvalued, TI is a bargain

d. IBM is overvalued, TI is overvalued

8. Suppose that the average historical PE for the NYSE is 15 and the average historical PE for Seahawk, Inc. is 18. Now suppose that today's PE for the NYSE is 22 and the Seahawk, Inc.'s PE is 29. Based on relative PE valuation (using the NYSE as the benchmark) which of the following statements is true?

Group of answer choices

a. Seahawk is overvalued (priced too high)

b. Seahawk is undervalued (priced too low)

c. Seahawk is correctly valued (priced just right, according to historical values)