Author Question: A share of stock will pay a dividend of 20 in one year, and will be sold for an expected price of ... (Read 44 times)

tuffie · **on:** Jun 30, 2018

A share of stock will pay a dividend of 20 in one year, and will be sold for an expected price of 500 at that time. If the current one-year interest rate is 5, the current price of the stock will be approximately equal to

A) 100.
B) 495.
C) 500.
D) 525.
E) none of the above

Question 2

Suppose the current level of output and the interest rate are such that the economy is operating on neither the IS nor LM curve. Which of the following is true for this economy?

A) Production does not equal demand.
B) The money supply does not equal money demand.
C) The quantity supplied of bonds does not equal the quantity demanded of bonds.
D) Financial markets are not in equilibrium.
E) all of the above