Question

10.	Which of the following represents a stock's fundamental value?
		A) the price the stock would sell at in the midst of a rational bubble
		B) the price the stock would sell at if the interest rate were zero
		C) the present value of its expected future dividend payments
		D) the simple sum of its future dividend payments
11.	Which of the following, all else fixed, will cause the real exchange rate to increase?
		A) a nominal depreciation
		B) a reduction in the foreign price level
		C) a reduction in the domestic price level
		D) all of the above please answer questions 10 and 11

Answer 1

10) The correct option is C) the present value of its expected future dividend payments.

Intrinsic value is the anticipated or calculated value of a company, stock, currency, or product determined through fundamental analysis. Intrinsic value is also called the real value and may or may not be the same as the current market value.

11) the correct option is B) a reduction in the foreign price level.

The real exchange rate measures the price of foreign goods relative to the price of domestic goods. While the nominal exchange rate measures the relation between the value of two currencies The real exchange rate measures the relative price of goods.

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