HW3 Answer KEY

HW3 Answer KEY - $75 ( ) (.12 .05) e D g P k g + + = =...

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NAME: ________________________________ EC370 – Winter 2009 HW3 Answer KEY Write your answers to the multiple choice questions in the appropriate space using CAPITAL LETTERS. 1) B 6) C 11) D 16) D 2) D 7) C 12) D 17) C 3) C 8) C 13) D 18) B 4) D 9) D 14) D 19) B 5) C 10) A 15) B 20) D SA Questions 21) You believe that a corporation's dividends will grow 5% on average into the foreseeable future. If the company's last dividend payment was $5 what should be the current price of the stock assuming a 12% required return? 0 0 (1 ) $5(1 .05)
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Unformatted text preview: $75 ( ) (.12 .05) e D g P k g + + = = =--The following questions refer to the Excel Assignment in the HW3 folder 22) Over the last 33 years, which asset class had the highest average yearly returns? According to this sheet, BONDS had an average return of 8.76%, which is higher than that of stocks. However, as I mentioned in class, this doesn’t include dividends (the yield on the S&P500 is usually b/w 1.5% and 2%). 23) PASTE YOUR EXCEL GRAPH IN THIS SPACE: -50-40-30-20-10 10 20 30 40 % Lehman US Aggregate Returns S&P500 Returns...
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This note was uploaded on 10/17/2009 for the course EC 370 taught by Professor Staff during the Spring '08 term at Oregon.

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