A Change in Perceived Risk of a Stock Changes

question 3

Multiple Choice

A change in perceived risk of a stock changes

• A)the expected dividend growth rate.
• B)the expected sales price.
• C)the required rate of return.
• D)the current dividend.

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Definitions:

Rate of Return

A measure of the gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Front-end Load

A sales charge or commission paid when an individual buys an investment, such as a mutual fund.

Commission

A service charge assessed by a broker or investment advisor for investment activity, such as buying or selling securities.

Asset Allocation Funds

Mutual funds that aim to provide a balanced mix of investment assets within one portfolio, typically including stocks, bonds, and cash, based on specific investment strategies or objectives.