1a) Trump, the Twitter president, in August 2019, tweeted: Who is our bigger enemy, Fed Chairman Powell or Chinese President Xi? Many times has he pressued the Federal Reserve to lower interest rates.

The tech bubble (also known as dot-com bubble or the Internet bubble) was a historic period of massive growth in the use, and adoption of the technology and internet mainly in the United States that occurred roughly from 1994 to 2002. The Nasdaq Composite stock market index, which included many technology and internet-based companies, peaked in value on March 10, 2000, before crashing to bottom in 2002.

Which statements are ACCURATE about these events?

Check all that apply:

- By DDM, at the lower interest rates that Trump wanted, the stock market would go much higher, which could become his achievements.

- By DDM, the tech bubble was the results of expected high future dividend from tech and internet companies.

- By DDM, the tech bubble was the results of high expected future growth of tech and internet companies.

- By DDM, the tech bubble was the results of low interest rates.

- As interest rates go lower, both stock and bond prices would go up.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1b) Which statements are CORRECT?

Check all that apply:

- The immediate market reaction to cash dividend distribution is the companys stock declining

- Shortsales make stock prices more informative

- By paying cash dividend, the true value per share of the firm decreases by the cash dividend amount per share

- Shortselling is a lot riskier than regular buy and sell.

- Security and Exchange Commission (SEC) prohibit shortselling

- Shortselling is one of the mechanisms that keep the market efficient

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1c) Which statements are CORRECT?

Check all that apply:

- By Dividend Discount Model (DDM), if a company never ever pays any cash in the future, its stock should be worth zero

- GE recently announced the news to cut future dividend. The plan hardly affects its current stock price

- NYSE is a primary market

- In DDM, the risk-adjusted discount rates can be replaced with treasury spot rates

- In DDM, the stock price is called ex-dividend price because it is the price before current dividend is paid out

- Shareholder's total return comes from two sources only: dividend and capital gain

- Stocks that don't pay dividend, such as, Amazon, Google, Facebook, etc., still have huge value. This contradicts DDM model