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Chapter 11 ___________________________ Stock Valuation and Risk 1. The common price-earnings valuation method applied the ______ price-earnings ratio to ________ earnings per share in order to value the firm’s stock. A) firm’s; industry B) firm’s; firm’sC) average industry; industryD) average industry; firm’s ANSWER: D 2. When evaluating stock performance, ______ measures variability that is systematically related to market returns; ______ measures total variability of a stock’s returns. A) beta; standard deviationB) standard deviation; betaC) intercept; betaD) beta; error term ANSWER: