Suppose a Stock Has the Same Expected Rate of Return

question 15

Multiple Choice

Suppose a stock has the same expected rate of return as a bank account. Then the price of the stock will

• A)rise and the expected rate of return will decrease.
• B)fall and the interest rate will decrease.
• C)rise and the expected rate of return will increase.
• D)fall and the expected rate of return will increase.
• E)fall and the expected rate of return will decrease.