For a Stock to Be in Equilibrium, Two Conditions Are

question 130

True/False

For a stock to be in equilibrium, two conditions are necessary: (1) The stock's market price must equal its intrinsic value as seen by the marginal investor and (2) the expected return as seen by the marginal investor must equal this investor's required return.

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Definitions:

Recognize Faces

The ability of humans or animals to identify or verify a person by viewing their facial features.

Perception

The process of interpreting and understanding sensory information.

Sensory Information

Data received through the senses (sight, hearing, touch, taste, and smell), which is processed by the brain to understand the environment.

Neural Impulses

Electrical signals transmitted along neurons that facilitate the communication between the brain and different parts of the body.