Q1 choose from option

a) A German companys stock is traded in the US over-the-counter (OTC) stock market in the form of American Depository Receipt (ADR). Most of this companys sales revenues come from the European market. Ceteris paribus, if euro depreciates (or loses value) relative to US dollar, then the dollar price of this companys ADR would ___.

Group of answer choices

increase

decrease

unchange

b) If investors believe a public companys senior executives know substantial inside information, then the managements decision to issue additional shares signals __ of the companys stock, and the management decision to repurchase (or buy back) existing shares signals ___ of the companys stock.

Group of answer choices

undervaluation, undervaluation

undervaluation, overvaluation

overvaluation, undervaluation

overvaluation, overvaluation

c) Which of the following pairs of securities are likely to have the highest return correlation coefficient?

Group of answer choices

Two US stocks from the same industry

Two US stocks from very different industries

One US stock and one Japanese stock

One Treasury bond and one US stock

d)The capital asset pricing model (CAPM) is most readily applied to estimate investors required rate of return on which of the following securities?

Group of answer choices

publicly traded stocks

private equity

Treasury bonds

corporate bonds

e) -In practice, how do financial analysts estimate the beta of a publicly traded stock?

Group of answer choices

Regress the stock's returns on S&P 500 index's returns, and the slope of the regression line is the stocks beta.

Regress the stock's returns on S&P 500 index's returns, and the intercept of the regression line is the stocks beta.

The yield to maturity of Treasury securities can be used as the stocks beta.

The expected return of the S&P 500 index can be used the stocks beta.

first increase and then decrease

e) -The capital asset pricing model (CAPM) describes the relationship ___ of an investment asset.

Group of answer choices

between expected return and total risk

between expected return and unsystematic risk

between expected return and systematic risk

between expected return and return standard deviation