Exhibit 27-1 -According to the Data in Exhibit 27-1

question 124

Multiple Choice

Exhibit 27-1
-According to the data in Exhibit 27-1,

• A)real interest rates are negatively related to inflation.
• B)real interest rates are negatively related to the gap between real and potential GDP.
• C)real interest rates and real GDP are positively correlated.
• D)the Fed does not follow a monetary policy rule.
• E)the nominal interest rate will rise less than inflation.

Understand the relationship between inflation rates and P/E ratios.

Calculate and interpret book value per share, its significance and compare it to market and liquidation values.

Identify the roles of different types of analysts and their methodologies in assessing firm value.

Understand and apply the concept of the market capitalization rate and its implications on stock evaluation.