For Markets to Be in Equilibrium, That Is, for There $\hat { \mathrm { r } } = \overline { \mathrm { r } }$

question 8

Multiple Choice

For markets to be in equilibrium, that is, for there to be no strong pressure for prices to depart from their current levels,

• A)The expected rate of return must be equal to the required rate of return; that is, \(\hat { \mathrm { r } } = \overline { \mathrm { r } }\)
• B)The past realized rate of return must be equal to the expected rate of return; that is \(\overline { \mathrm { r } } = \tilde { \mathrm { r } }\)
• C)The required rate of return must equal the realized rate of return; that is \(r = \overline { \mathrm { r } }\)
• D)All three of the above statements must hold for equilibrium to exist; that is, \(\hat { \mathrm { r } } = \mathrm { r } = \overline { \mathrm { r } }\)
• E)None of the above statements are correct.

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Definitions:

Muscular Arteries

Arteries that deliver blood from the heart to specific organs, characterized by a thick tunica media with smooth muscle for regulating blood flow.

Hepatic Portal Circulation

The system of blood vessels that carry blood from the gastrointestinal tract and spleen to the liver, facilitating nutrient processing.

Digestive

Pertains to the system in the body responsible for breaking down food into nutrients and waste.

Tunica Intima

The innermost layer of a blood vessel, composed of endothelial cells that line the interior surface of the vessel.