Government bonds currently have a return of 5% pa. A stock has an expected return of 6% pa and the market return is 7% pa. What is the beta of the stock?

The following is the Dividend Discount Model used to price stocks:

### p_0=\frac{d_1}{r-g} ###

Which of the following statements about the Dividend Discount Model is **NOT** correct?

A five year bond has a face value of $100, a yield of 12% and a fixed coupon rate of 6%, paid semi-annually.

What is the bond's price?

**Question 322** foreign exchange rate, monetary policy, American and European terms

The market expects the Reserve Bank of Australia (RBA) to decrease the policy rate by 25 basis points at their next meeting.

Then unexpectedly, the RBA announce that they will decrease the policy rate by 50 basis points due to fears of a recession and deflation.

What do you expect to happen to Australia's exchange rate? The Australian dollar will:

A fairly priced stock has an expected return equal to the market's. Treasury bonds yield 5% pa and the market portfolio's expected return is 10% pa. What is the stock's beta?

A man has taken a day off from his casual painting job to relax.

It's the end of the day and he's thinking about the hours that he could have spent working (in the past) which are now:

Which of the following statements about futures and forward contracts is **NOT** correct?

**Question 743** price gains and returns over time, no explanation

How many years will it take for an asset's price to **triple** (increase from say $1 to $3) if it grows by **5**% pa?

**Question 745** real and nominal returns and cash flows, inflation, income and capital returns

If the nominal gold price is expected to increase at the same rate as inflation which is 3% pa, which of the following statements is **NOT** correct?

On which date would the stock price increase if the dividend and earnings are higher than expected?