________________________________________ Is the Level of Earnings and the Growth in the Levels

question 76

Short Answer

________________________________________ is the level of earnings and the growth in the levels of earnings expected to persist in the future.

---

Definitions:

Expected Inflation Rate

The anticipated rate at which the general level of prices for goods and services will rise over a period of time.

Risk Averse

The preference to avoid uncertainty, referring to the behavior of investors who prefer lower returns with known risks over higher returns with unknown risks.

Risk-Free Rate

An ideal rate of return on an investment with no risk, typically represented by government bond yields.

Market Risk Premium

The increased return an investor hopes to gain by investing in a risky market portfolio rather than in assets free of risk.