7. Using efficient market hypothesis and theory of rational expectation. Can we observe the expected...
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7. Using efficient market hypothesis and theory of rational expectation. Can we observe the expected return? If not, what is your solution?
8. Suppose that the average growth rate of the economy has been 2%. given a forecast of 4% growth this year, if rational expectations hold, then the expected forecast error is?
9. Austin bought a stock on 1/1/2019 for $60,000, at the end of 2019, he sold the stock for 70,000. During the course of the year, Austin received $200 in dividends. The CPI index on 1/1/2019 was 700, and CPI index on 12/31/2019 was 720. What is the inflationadjusted return?
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