Markets to Be in Equilibrium, That Is, for There to Be

question 96

Multiple Choice

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, = r.
• B)The past realized rate of return must be equal to the expected future rate of return; that is, = .
• C)The required rate of return must equal the past realized rate of return; that is, r = .
• D)All three of the above statements must hold for equilibrium to exist; that is = r = .
• E)None of the above statements is correct.

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