Unformatted text preview: • P/E ratios, yield curves and subsequent states of the economy • Life cycle approach and security analysis • The effect of changes in risk on the P/E ratio 4 Problems - (Each problem will be worth 1.25 points) 1. Expected return (when given states of the economy, probabilities that they will occur and the company’s return in each state) 2. CAPM 4. Stock valuation with constant dividend growth and zero growth (2 problems) Extra Credit-1 extra point on quantitative easing. What is it, how it is done and the effects it can have. Why other counties don’t like the quantitative easing done by our Federal Reserve Bank (i.e. how they will be affected by it)...
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- Spring '08
- Financial Markets, Federal Reserve bank