If the Expected Return Is Less Than the Required Return

question 108

True/False

If the expected return is less than the required return, investors will sell the asset, because it is not expected to earn a return commensurate with its risk.

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Definitions:

Majority

Indicates more than half of a particular group or quantity, often used to describe the greater part of a total number.

Disaffirm

To assert the invalidity of; often related to contracts or agreements, indicating a refusal to recognize them as binding.

Uniform Commercial Code

A set of laws that govern commercial transactions in the United States, aimed at making business laws more consistent across states.

Minor

A person under the age of legal adulthood, which varies by jurisdiction but is typically 18 years old in many countries.