Suppose a Stock Has a Higher Expected Rate of Return

question 128

Multiple Choice

Suppose a stock has a higher expected rate of return than a bank account. Then

• A)the price of the stock will rise and the expected rate of return will decrease.
• B)the price of the stock will fall and the interest rate will decrease.
• C)the price of the stock will fall and the expected rate of return will increase.
• D)the price of the stock will fall and the expected rate of return will decrease.
• E)Not enough information is given to determine the return on the stock.

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Definitions:

Logical Extension

A strategy children use to increase their vocabulary in which they extend a new word to other objects in the same category.

False Belief Tasks

Are cognitive exercises used primarily in developmental psychology to assess an individual's understanding that others can hold beliefs different from reality.

Egocentric Problem Solvers

A characteristic of early childhood cognitive development where individuals can only see situations from their own perspective.

Present Knowledge

The current understanding or information one has about a subject or situation.