Question: 1. a. Differentiate between price weighted index and value weighted index giving examples. b. Based on the dividend-discount model, what do you think would happen

1. a. Differentiate between price weighted index and value weighted index giving examples.

b. Based on the dividend-discount model, what do you think would happen to stock prices if there were an increase in the perceived riskiness of bonds?

c. Use the dividend-discount model to explain why an increase in stock prices is often a good indication that the economy is expected to do well.

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