The s& p 500 index is one of the most commonly used benchmark indices for the u. s. equity markets. consisting of 500 companies, it is a market value-weighted index. this means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies. based on your understanding of p/e ratios, in which of the following situations would the average trailing p/e ratio (current price divided by earnings per share over the previous 12 months) of the s& p 500 index be higher? the outlook for the economy and the markets is for a downturn. the outlook for the economy and the markets is for an improvement. you invest $100,000 in 40 stocks, 20 bonds, and a certificate of deposit (cd). what kind of risk will you primarily be exposed to? stand-alone risk portfolio risk generally, investors would prefer to invest in assets that have: a higher-than-average expected rate of return given the perceived risk a lower-than-average expected rate of return given the perceived risk

The sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level. suppose firms announce the prices for their products in advance, based on an expected price level of 100 for the coming year. many of the firms sell their goods through catalogs and face high costs of reprinting if they change prices. the actual price level turns out to be 110. faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. sales from catalogs will

Storico co. just paid a dividend of $3.15 per share. the company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. if the required return on the company’s stock is 12 percent, what will a share of stock sell for today?

David burdick is the ceo of acme bubblegum, a successful public company. as one of the cofounders of the company, burdick has enjoyed speaking and writing about the success of acme bubblegum for several years. typically, he speaks at conferences or directly to the press, but recently, he has been blogging about his firm anonymously. specifically, he defended a recent advertising campaign that was unpopular among consumers and pointedly attacked one of acme bubblegum’s competitors. burdick deeply enjoys his anonymous blogging and believes that none of his readers actually know that he works for acme bubblegum.should burdick be allowed to praise his company’s performance anonymously online? should he be allowed to attack his competitors without disclosing his relationship with the company? how would you feel if the ceo of a company at which you shopped was secretly writing criticisms of his or her competition? how would you feel if you knew a writer for your favorite blog was actually closely involved in a company that the blog discussed? 1. define the ethical issue? 2. who are the primary stakeholders? 3. what are the possible alternatives? 4. how could you evaluate the ethical implications of the alternative actions (use appropriate decision rules)? 5. what action would you recommend and why?