If Expected Return Is Less Than Required Return on an Asset,rational

question 22

Multiple Choice

If expected return is less than required return on an asset,rational investors will:

• A) Buy the asset, which will drive the price up and cause expected return to reach the required return.
• B) Sell the asset, which will drive the price down and cause the expected return to rise.
• C) Sell the asset, which will drive the price up and cause the expected return to drop.
• D) Buy the asset, since price is expected to increase.

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Definitions:

Job Employability

The set of skills, knowledge, and attributes that make an individual more likely to secure and succeed in employment.

Job Security

The probability that an individual will retain their job in the near future, often reflecting the stability of employment within a company or economy.

Generation X

The demographic cohort following the baby boomers and preceding the Millennials, typically considered to be born from the early-to-mid 1960s to the early 1980s.

Generation Y

Also known as Millennials, the demographic cohort following Generation X and preceding Generation Z, generally born between 1981 and 1996.