Answer:
a. In this case, its goes for open market sales operations, This is because to increase the value of federal funds, the Fed has to reduce the money supply
b. In this case, its goes for open market purchase operation. This is because an increase in the differential between the discount rate and federal funds rate would encourage the depositary institutions to borrow money from Fed, thereby increasing the supply of money
If Professor Siegel is correct that stocks are less risky than bonds, then the risk premium on stock may be zero. Assuming that the risk-free interest rate is 2.5 percent, the growth rate of dividends is 1 percent and the current level of dividends is $70, use the dividend-discount model to compute the level of the S&P 500 that is warranted by the fundamentals.
Instruction: Round your response to 2 decimal places.
The level of the S&P 500 is
Answer:
Dividend discount model:
Price= D(1+g)/r-g
g=growth rate 1%
r= as given in question risk free rate 2.5%
D₀= $70
D₁=$70(1+0.01) with growth rate
Solution:
70(1+0.01)/(0.025-0.01)
=$4713.33
The grace period, during which a policy remain in force even though the premium has not been paid depends on the state. But generally, a grace period of 7 days is usually allowed for weekly premium payments, ten days for monthly payment and thirty one days for other policies.
$2,989.12
Is the answer for your monthly budget
