If Markets Are in Equilibrium, Which of the Following Conditions

question 106

Multiple Choice

If markets are in equilibrium, which of the following conditions will exist?

• A) Each stock's expected return should equal its required return as seen by the marginal investor.
• B) All stocks should have the same expected return as seen by the marginal investor.
• C) The expected and required returns on stocks and bonds should be equal.
• D) All stocks should have the same realized return during the coming year.
• E) Each stock's expected return should equal its realized return as seen by the marginal investor.

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Definitions:

Chocolate-Covered Peanuts

Chocolate-covered peanuts are a snack or confectionery item consisting of peanuts coated in a layer of chocolate.

Total Revenue

The overall amount of money generated by a business from its sales of goods or services before any costs or expenses are deducted.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specified time period.

Table: Price Elasticity

A tabulated representation of how the quantity demanded of a good responds to changes in its price, expressed as a ratio of percentage changes.