than YTM for his 1-year holding period. What must be the YTM for the buyer who took over the bond from the speculator, assume this buyer holds the bond for the remaining 2 year till maturity? Select the best estimate. A. YTM3% 26. You analyze Samsung stock, find its beta 1.3, the expected market return 4% and the risk-free rate 1%? According to CAPM, what is Samsung's expected return? A. 6.2% B.5.2% C. 4.9% D. 3.9% 27. About CAPM, which of the following are CORRECT? (Select all that apply) A. CPAM says each individual security's risk premium is proportional to its individual beta. B. CPAM says that the reward-to-risk ratios of all stocks should be equal. C. Systematic risk is captured by betas. D. Unsystematic risk is captured by alphas. 28. About diversification and risk, which of the following are CORRECT? (Select all that apply) A. diversification can eliminate unsystematic risk. B. unsystematic risk is diversified away because the unsystematic risk of each individual stock can offset each other when many stocks are put together. C. market risk can be averaged out but cannot be removed or reduced through diversification. D. A fully diversified portfolio means almost zero unsystematic risk. 29. About shortsale in the stock market, which of the following statements are CORRECT? (Select all that apply) A. Short sellers borrow securities and sell them immediately. B. Shortsales allow the information to get into the stock price. C. Shortselling is a lot riskier than regular 'buy and sell'ad d o D. Short sellers face unlimited potential of profiting. 30. About capital budgeting methods, which of the following are CORRECT? (Select all that apply) A. Payback period is a short-sighted method. B. If the profitability index is positive, IRR will exceed the required return C. The net present value is computed using IRR. D. Both IRR and profitability index methods ignore the scale of the project. E. Ranking multiple projects by IRR or Pl is not always consistent with ranking by NPV