ANSWER BOTH

17. A stock with a beta of 0.25 would be characterized as a. Being 25% as risky as the market average and having a higher risk premium b. Being 25% more risky than the market average and having a lower risk premium c. Being neither more or less risky than the market average d. Being 25% more risky than the market average and having a higher risk premium e. Being 25% as risky as the market average and having a lower risk premium a 18. A company's PE ratio reflects the market's view of earnings potential of a company. When compared to the PE ratios of other companies in the same sector, what does a higher PE ratio indicate? a. That the market expects neutral growth and neutral profit b. That the market expects higher growth and higher profit C. PE ratios cannot be interpreted without factoring the future dividend yield d. That the market expects lower growth and lower profit