ECO 561 Week 5 Quiz

1. The Classical Theory of Asset Prices assumes which of the following ideas? A. The interest rate to use is the nominal rate, assets are the discounted sum of their future values, and expected income is the best information available. B. Actual past income is the best information available, assets are the discounted sum of their future values, and the interest rate is the safe interest rate plus a risk premium. C. The value of an asset is the discounted present value of expected cash flows, exp...

1. The Classical Theory of Asset Prices assumes which of the following ideas? A. The interest rate to use is the nominal rate, assets are the discounted sum of their future values, and expected income is the best information available. B. Actual past income is the best information available, assets are the discounted sum of their future values, and the interest rate is the safe interest rate plus a risk premium. C. The value of an asset is the discounted present value of expected cash flows, exp...