Two Conditions Are Used to Determine Whether a Stock Is

question 61

True/False

Two conditions are used to determine whether a stock is in equilibrium: (1)Does the stock's market price equal its intrinsic value as seen by the marginal investor,and (2)does the expected return on the stock as seen by the marginal investor equal his or her required return? If either of these conditions,but not necessarily both,holds,then the stock is said to be in equilibrium.

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Definitions:

Competencies

Refers to the skills, knowledge, and abilities that individuals need to perform effectively in their roles.

Contingencies

Events or conditions that are possible but cannot be predicted with certainty, often requiring planning for multiple potential outcomes.

Social Acceptance

The act of being recognized, approved, or accepted within a social group or society at large.

Cognitive Intelligence

The ability to learn, understand, reason, and solve problems through mental processes, including memory, awareness, and perceptual cognition.