Fama and French (2002)use the Dividend Growth Model and Conclude

question 70

Multiple Choice

Fama and French (2002) use the dividend growth model and conclude that the market risk premium is now of the order of:

• A)2% p.a.
• B)1% p.a.
• C)3% p.a.
• D)5.5% p.a.

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Definitions:

Circular-Flow Diagram

A visual model that shows how goods, services, and money move through the economy in a circular manner between households and firms.

Factors Of Production

The resources used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Circular-Flow Diagram

A diagrammatic representation illustrating the flow of economic resources through various markets, connecting households with firms.

Factors Of Production

Factors employed in the creation of goods or services with the aim of generating economic profit encompass land, labor, capital, and entrepreneurship.