1. What is the difference between sterilized and nonsterilized intervention?
2. The of Party Time, Inc. just paid a dividend of $3.5 per share (D0). Analysts expect its dividend to grow at 8% per year for the next three years and then 4% per year thereafter. If the required rate of return on the stock is 22%, what is the current value of the stock?
$14.78.
$22.30.
$25.98.
$40.38.
$33.74.
$23.31.
2. Which of the following is false when markets are semistrong-form efficient
- Investors cannot expect to earn positive risk-adjusted returns.
- It is pointless to time the purchase or sale of the firm’s securities.
- Private information has no predictive power in respect to market prices.
-The best forecast of future price is current price adjusted for trend.