3. Brokers and mutual funds do the same thing, invest your money for you. Is that statement true or false? Explain. What kind of financial institution is a mutual fund? What is its distinguishing feature? Describe how savings banks and insurance companies are similar to mutual funds. (5 points) 4. Lighthouse Inc. recently paid an annual dividend of $1.00 per share. Analysts expect that amount to be paid for three years after which dividends will grow at a constant 5% per year indefinitely. The stock is currently trading at $20, and investors require a 15% return on similar issues. Has the stock market properly priced Lighthouse's stock? (10 points) 5. Abaco Market's had a recent annual dividend measuring $3.55 a share. Over the years the firm has been growing at a consistent 4% rate for several years, but analysts generally believe that better times are ahead, and that future growth will be in the neighborhood of 5%. The stock is currently selling for $75. Stocks similar to Abaco Markets earn returns ranging from 8% to 10%. a. Calculate values for a share of Abaco Markets interest rates of 8%, 9%, and 10%. b. Do you think Abaco Markets is a good investment for the long run, that is, for someone planning to hold onto it for ten or more years? c. Do you think it's a good investment for the short term? That is, should you buy it with the expectation of selling in a relatively short period, say a year or less? d. Repeat the calculations of part a assuming that instead of rising, Tyler's growth rate (1) remains at 4% or (2) declines to 3%. e. Comment on the range of prices that you've calculated. (10 points)