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

question 32

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,.
• B) The past realized rate of return must be equal to the expected rate of return; that is,.
• C) The required rate of return must equal the realized rate of return; that is,.
• D) all companies must pay dividends.
• E) no companies can be in danger of declaring bankruptcy.

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Definitions:

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without prior learning or conditioning.

Conditioned Response

A learned reaction to a previously neutral stimulus, established through classical conditioning.

Learned Response

A reaction or behavior that an individual acquires through conditioning or experience in response to a specific stimulus.

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus in classical conditioning.