Exercise set 3 - First Question (c)
Number of replies: 1
Hi professor, i am having doubts interpreting the english on this questions, in the exercise says "Until year 5 everything remains
constant", so the payout policy should impact dps y6? There is a similar question in the review quiz, question 5, where i have also doubts understanding when do we have to consider this change in payout policies.
In reply to Guilherme P. da Fonseca Santos Carvalho
Re: Exercise set 3 - First Question (c)
by Julio Crego -
In the question, it says: "starting on year 5...." which means year 5 is different.
If the question reads for X years, it means all of them are included. For instance, for the next three years, it means years 1,2, and 3.
Do not worry, in the exam, it will be very clear. I will always try to use dates. E.g. In 2023, the payout ratio is 50%. it remains the same in 2024, 2025, 2026, and 2027. In 2028, it will be 100% and will remain the same onward
If the question reads for X years, it means all of them are included. For instance, for the next three years, it means years 1,2, and 3.
Do not worry, in the exam, it will be very clear. I will always try to use dates. E.g. In 2023, the payout ratio is 50%. it remains the same in 2024, 2025, 2026, and 2027. In 2028, it will be 100% and will remain the same onward