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:

Vigilance

Sustained attention and watchfulness towards potential dangers or important stimuli.

Chunking

An information processing strategy that involves grouping or organizing material into larger, more manageable units to improve memory retention.

Shallow Processing

A cognitive processing of stimuli that focuses on superficial characteristics rather than the deeper meaning, leading to less durable memory traces.

Physical Features

These are the natural and distinctive characteristics of a person's or object's appearance, including shape, size, and configuration.