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.

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, opposite to a normal good.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from the production and consumption of goods and services.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Positively Sloped

A line or curve on a graph that moves upward and to the right, indicating a direct relationship between two variables.