Question: You are trying to forecast the expected level of the
You are trying to forecast the expected level of the aggregate Toronto stock market for the next year. Suppose the current three- month Treasury bill rate is 4 percent, the yield to maturity on 10 + - year Canada bonds is 5 percent per year, the expected rate of inflation is 2 percent per year, and the expected EPS for the S& P/ TSX Composite is $ 450. What is your forecast, and why?
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