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  3. The Economics of Money Banking and Financial Markets The Business
  4. Quiz 7: The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

The Value of Any Investment Is Found by Computing the A

Question 4
Multiple Choice

The value of any investment is found by computing the A) present value of all future sales. B) present value of all future liabilities. C) future value of all future expenses. D) present value of all future cash flows.

Related questions
Q 5
In the one-period valuation model, the value of a share of stock today depends upon A) the present value of both the dividends and the expected sales price. B) only the present value of the future dividends. C) the actual value of the dividends and expected sales price received in one year. D) the future value of dividends and the actual sales price.
Q 6
In the one-period valuation model, the current stock price increases if A) the expected sales price increases. B) the expected sales price falls. C) the required return increases. D) dividends are cut.
Q 7
In the one-period valuation model, an increase in the required return on investments in equity A) increases the expected sales price of a stock. B) increases the current price of a stock. C) reduces the expected sales price of a stock. D) reduces the current price of a stock.
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