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Q1. State whether the following statement is True or False and explain why. The return on a risk-free asset and the return on any common
Q1. State whether the following statement is True or False and explain why. "The return on a risk-free asset and the return on any common stock are perfectly negatively correlated." (10 marks) Q2. Company X is expected to pay an end-of-year dividend of $5 a share. After the dividend its stock is expected to sell at $110. If the market capitalization rate is 8%, what is the current stock price? (10 marks)
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