7. Which of the following is true?

Information
plays an important role in asset pricing because it allows the buyer
to more  


accurately
judge ________.

Using
the one-period
valuation model, assuming a year-end
dividend of $1.00, an expected  


sales
price of $100, and a required rate of return of 5%, the current price
of the stock would be

Stockholders
are residual claimants, meaning that they

An
inverted yield curve predicts that short-term
interest rates

A
________ yield curve predicts a future increase in inflation.

According
to the segmented markets theory of the term structure

If
the expected path of one-year
interest rates over the next five years is 4 percent, 5 percent, 7  


percent,
8 percent, and 6 percent, then the expectations theory predicts that
todayʹs
interest rate  


on
the five-year
bond is

Typically,
yield curves are

Bonds
with relatively low risk of default are called ________ securities
and have a rating of Baa  


(or
BBB) and above; bonds with ratings below Baa (or BBB) have a higher
default risk and are  


called
________.

)
Which of the following statements are true?