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For a price of $1040, Camille will sell you a share which just paid a dividend of$100, and is expected to pay dividends every year forever, growing at a rate of 5% pa.

So the next dividend will be $100(1+0.05)^1=105.00$, and the year after it will be $100(1+0.05)^2=110.25$ and so on.

The required return of the stock is 15% pa.

Would you like to the share or politely ?

All things remaining equal, the variance of a portfolio of two positively-weighted stocks rises as:

In the dividend discount model:

$$P_0= \frac{d_1}{r-g}$$

The pronumeral $g$ is supposed to be the:

A European call option will mature in $T$ years with a strike price of $K$ dollars. The underlying asset has a price of $S$ dollars.

What is an expression for the payoff at maturity $(f_T)$ in dollars from owning (being long) the call option?

Below are some statements about loans and bonds. The first descriptive sentence is correct. But one of the second sentences about the loans' or bonds' prices is not correct. Which statement is NOT correct? Assume that interest rates are positive.

Note that coupons or interest payments are the periodic payments made throughout a bond or loan's life. The face or par value of a bond or loan is the amount paid at the end when the debt matures.

For an asset price to double every 10 years, what must be the expected future capital return, given as an effective annual rate?

A home loan company advertises an interest rate of 9% pa, payable monthly. Which of the following statements about the interest rate is NOT correct? All rates are given with an accuracy of 4 decimal places.

Mr Blue, Miss Red and Mrs Green are people with different utility functions. Which of the statements about the 3 utility functions is NOT correct? If a stock's future expected continuously compounded annual returns are normally distributed, what will be bigger, the stock's or continuously compounded annual return? Or would you expect them to be ?