Inflation Targets Are Usually Specified as

question 229

Multiple Choice

Inflation targets are usually specified as

• A) deviations from the inflation rate.
• B) a specific inflation rate target, for example, 1 percent.
• C) a range for the inflation rate.
• D) the short- term interest rate rate minus 2 percent.

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Definitions:

PEG Ratio

A stock valuation metric that measures the price-to-earnings ratio (P/E) of a stock divided by its earnings growth rate.

Growth Rate

The rate at which an economic variable, such as the Gross Domestic Product (GDP), a company's profits, or an investment's value, increases over a specified period of time.

Market Capitalization Rate

The expected return on an investment in the market, often used in the valuation of stocks and to determine a company's cost of equity.

PVGO

Present Value of Growth Opportunities; a model that estimates the value of a firm's shares excluding its current earnings, focusing on future growth.