For a Stock to Be in Equilibrium,that Is,for There to Be

question 80

Multiple Choice

For a stock to be in equilibrium,that is,for there to be no long-term pressure for its price to depart from its current level,then

• A)the expected future return must be less than the most recent past realized return.
• B)the past realized return must be equal to the expected return during the same period.
• C)the required return must equal the realized return in all periods.
• D)the expected return must be equal to both the required future return and the past realized return.
• E)the expected future return must be equal to the required return.

---

Definitions:

Tax Burden

The total amount of tax paid by individuals or businesses, often expressed as a percentage of income or GDP.

Inelastic

Refers to a condition where the demand for a product or service changes very little when there is a change in its price.

Price Elasticities

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Social Security

A government program that provides financial assistance to retirees, disabled workers, and their families.