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:

Andropause

refers to a decline in testosterone levels and its associated symptoms in middle-aged and elderly men, similar to menopause in women.

Menopause

The transition phase in a woman's life marking the end of menstrual cycles, usually occurring in late 40s to early 50s.

Male Menopause

A term sometimes used to describe a decrease in testosterone levels or the diminishing of sexual and physiological function in middle-aged men.

Sexual Reproductive System

The organ system involved in producing offspring, including the external sex organs and internal structures such as the uterus in females and the testes in males.