Question
At the end of year 2019, you observed that the S&P 500 index was 3000, the yield of the U.S. 10-year treasury note was 1.4%
At the end of year 2019, you observed that the S&P 500 index was 3000, the yield of the U.S. 10-year treasury note was 1.4% and the S&P 500 index earning yield was 3.6%. The spread between the earning yield and the 10-year Treasury note was______? You forecasted for 12 months forward EPS of S&P 500 index is $100 you expected the Fed will reduce twice of the Fed Fund rate and each time to raise 0.25%. Assuming the spread will remain at the same level by the end of the year 2020. You expected the S&P 500 index will be _____ at the end of the year 2020?
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