The Price of a Stock Will Increase,ceteris Paribus,when

question 73

Multiple Choice

The price of a stock will increase,ceteris paribus,when

• A)Future earnings expectations increase.
• B)The interest rate increases.
• C)The supply of the stock increases.
• D)There is a surplus of the stock at the current price.

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Definitions:

Trade Credit Terms

Trade credit terms are the conditions agreed upon between a buyer and seller regarding the payment for goods or services, including the repayment period and any discounts for early payment.

Discount

The reduction in the price of goods or services, usually offered to prompt sales or because the product is damaged, outdated, or in less demand.

Restricted Policy

A policy under which holdings of cash, securities, inventories, and receivables are minimized.

Relaxed Policy

A policy under which relatively large amounts of cash, marketable securities, and inventories are carried and under which sales are stimulated by a liberal credit policy, resulting in a high level of receivables.