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

question 47

Multiple Choice

For a stock to be in equilibrium, that is, for there to be no consistent pressure for its price to depart from its current level, what must occur?

• 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 future returns must be equal to the required return.

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Definitions:

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