QUESTION $6$ The pure, short$-$term earnings model:

A$.$ ignores present value analysis and its long$-$term forecasts of dividends and earnings per share.

$B*$ uses the past three months to estimate earnings per share.

C$.$ disregards the long$-$term growth forecasts for earnings per share.

D$-$uses the payout ratio and return on equity to derive the P$/$E ratio.

QUESTION $26$ One basic problem with the application of the Capital Asset Pricing Model when computing Ke is that

$A*(Km-RF)$ is not observable in the market.

$B*$ the analyst needs to forecast dividends for next year.

C$.$ beta is a historical number.

D$-$ the risk$-$free rate changes every day.

Question $32$

Beta measures:

A$.$ the relationship of the P$/$E ratio to the earnings growth rate.

$B*$ individual company stock price risk, relative to the market.

C$-$ the risk within a portfolio than cannot be diversified away.

D$.$ the stock price growth of one company compared to that of a second company.

QUESTION $33$ A stock is a good buy when the value of which of these ratios is low, compared to a market index or company history?

A$.$ Price$-$to$-$book$-$value

B$.$ Price$-$to$-$earnings

C$.$ Dividend yield

D$.$ All of the above

Question $34$

The major device that indicates what the firm owns, and how these assets are financed, in the form of liabilities or ownership interest is:

A$.$ the balance sheet.

B$.$ the statement of cash flows.

C$.$ the income statement.

D$-$ the general ledger.