The value of a stock is based on the
a. present values of the dividend stream and final price. As a result, the value of a stock rises when interest rates rise.
b. present values of the dividend stream and final price. As a result, the value of a stock falls when interest rates rise.
c. future values of the dividend stream and final price. As a result, the value of a stock rises when interest rates rises.
d. future values of the dividend stream and final price. As a result, the value of a stock falls when interest rates rise.
b
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Money functions as a(n)
A) medium of exchange. B) unit of account. C) store of value. D) all of the above.
If a country has a current account balance of $100 billion and the official settlements account balance is zero, then the country's capital and financial account balance must be
A) negative but not necessarily equal to -$100 billion. B) equal to -$100 billion. C) equal to $100 billion. D) positive but not necessarily equal to $100 billion. E) zero.
If the production technology in a Robinson Crusoe economy has increasing returns to scale, there is no production/consumption plan that is efficient.
Answer the following statement true (T) or false (F)
Which of the following is an area of substantial agreement among macroeconomists?
a. Expansionary policies that lead to inflation can keep the actual rate of unemployment below the natural rate. b. It is relatively easy to time shifts in monetary policy in a manner that will promote economic stability. c. Price stability is a proper goal of monetary policy. d. It is relatively easy to time shifts in fiscal policy in a manner that will promote economic stability.