Notes on the Money Market and LM Curve – Eco 3202 – Fall ...

2) Suppose the CEO of Company ABC makes a statement that the company’s expected earnings are now lower than previously expected (i.e., a pessimistic outlook) so that investors now expect profits to be ‘flat’ at $15,000 for the next three years (assume the initial expected path of interest rates of 3, 4, and 5% in year 1, 2, and 3 ... ................
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