Question 1 PRIVATE V PUBLIC SECTOR OBJECTIVES “According to the efficient market hypothesis all share prices are correct at all times. This is achieved by prices moving randomly when new information is publicly announced. New information from published accounts is the only determinant of the random movements in share price. Question 3 BASIC DISCOUNTING (i) in a year’s time (ii) in two years’ time (iii) immediately? Required: Required: (10 marks) (10 marks) The discount rate is 15%. 1
