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EXERCISE 4: (10 Marks) Again, given the the fundamental asset pricing equation pt=Etmt+1gt+1 2 Again, where mt+1=andgt+1=dt+1+pt+1 And defining the price dividend ratio vt:=pt/dt. Consider
EXERCISE 4: (10 Marks) Again, given the the fundamental asset pricing equation pt=Etmt+1gt+1 2 Again, where mt+1=andgt+1=dt+1+pt+1 And defining the price dividend ratio vt:=pt/dt. Consider a growing, non-random dividend process dt+1=dt where 0
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