You are reading a report where a buy recommendation for a company was based upon the fact that its PE ratio is lower than the average for the industry. What are the implicit underlying assumption(s) made by the analyst when producing such recommendation?

Select one:

a.

The firms in the group share the same board members

b.

The firmsin the group have the same age

c.

The firms in the group are of equivalent risk, growth and size

d.

The firms in the group share the same customers

Which of the following represent(s) features of real options?

I.The higher the volatility of the underlying asset the higher the value of the option

II.An option protects against downside risk but preserves the upside potential

III.The longer the maturity of an option the higher the value of the option

IV.An option gives the holder the right but not the obligation to buy, sell or use an asset

Select one:

a.I, II, III and IV

b.IV only

c.I only

d.II only