Assume That the S&P 500 Currently Has a Dividend Yield

question 37

Multiple Choice

Assume that the S&P 500 currently has a dividend yield of 3% and that on average,the dividends of S&P 500 firms have increased by about 5% per year.If the risk-free interest rate is 4%,then your estimate for the future market risk premium is:

• A)7%.
• B)8%.
• C)6%.
• D)4%.

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Definitions:

Homosexual

Pertaining to a sexual orientation characterized by attraction to individuals of the same sex.

Heterosexual

A sexual orientation where individuals are romantically or sexually attracted to people of the opposite gender.

Human Sexual Response

The sequence of psychological and physiological changes that occur in the body as a result of sexual stimulation, typically including phases such as arousal, plateau, orgasm, and resolution.

Direct Measurement

The process of obtaining data or information through direct observation or physical quantification, without reliance on indirect methods.