Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1) During an expansion, firms' profits are higher and hence the dividends on their stocks are higher. How does this fact affect the price of

1) During an expansion, firms' profits are higher and hence the dividends on their stocks are higher. How does this fact affect the price of their stocks?

a) Price goes up

b) Price goes down

c) Price remains unchanged

d) Not enough information to conclude

2) Lower P/E ratio indicates that

a) Earnings of the company is lower

b) Price paid for each dollar of earnings is higher

c) Earnings of the company is higher

d) Price paid for each dollar of earnings is lower

3) According to the Efficient Market Hypothesis, an expert cannot consistently beat the market because

a) Expert overestimates their own expertise

b) Anyone can tell if the price will increase or decrease in the next period

c) Prices reflect all available information so the expert does not have any information that is not reflected in the price

d) Experts can be irrational at times

4) If two projects have different size of initial investment, which measure is better to compare their value?

a) Net Present Value

b) Profitability Index

c) Payback Rule

d) Equivalent Annual Annuity

please explain and provide correct answer otherwise downvote and report

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Expenditure Decisions In The Urban Community

Authors: Howard G Schaller

1st Edition

1317310985, 9781317310983

More Books

Students also viewed these Economics questions