Author Question: Suppose there is an increase in profitability. This suggests that A) firms have increased their ... (Read 60 times)

jparksx · **on:** Jun 30, 2018

Suppose there is an increase in profitability. This suggests that

A) firms have increased their expectations of future profits.
B) the real interest rate has increased.
C) the rate of depreciation has increased.
D) all of the above

Question 2

A consol bond promises to pay 1000 each year, forever, starting next year. If the nominal interest rate is 5, the present discounted value of this consol is

A) 900.00.
B) 995.00.
C) 2,500.00.
D) 20,000.00.
E) 25,000.00.