Assume That the S&P/TSX Composite Index Currently Has a Dividend

question 100

Multiple Choice

Assume that the S&P/TSX Composite Index 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:

Id

A component of Sigmund Freud's model of the psyche, it represents the instinctual, primal part of the mind that is the source of basic drives and impulses.

Published Case Histories

Documented records of individuals’ medical or psychological conditions and treatments, often used for educational and research purposes.

Hypnosis

A state of focused attention, reduced peripheral awareness, and an enhanced capacity to respond to suggestion, often used for therapeutic purposes.

Libido

A term often used in psychoanalytic theory to denote the energy of the sexual drive as a component of the life instinct.