1. What roles does the current account play regarding the capital account? In what way is the current account related to the national economy?
2. Suppose stock price of Marine Company at present is $20. The dividends are expected to grow at 8%. The annual dividend one year forward is $0.60. Compute the shareholder’s expected return on the stock using constant growth DDM.
3. Suppose you have a project that has a 0.7 chance of doubling your investment in a year and a 0.3 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter the percentage in decimal format: 0.xxxx i.e. 12.34% would be 0.1234).