Assume That There Are Two Investments Similar in All Respects

question 317

Multiple Choice

Assume that there are two investments similar in all respects, but Investment X has a higher rate of return than does Investment Y. As a result of the arbitrage process, the price of Investment

• A) X will fall and its rate of return will fall.
• B) Y will rise and its rate of return will fall.
• C) X will fall and its rate of return will rise.
• D) Y will fall and its rate of return will rise.

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Definitions:

Bad-News Messages

Communications that convey unfavorable, disappointing, or negative information.

Classical Conditioning

An educational method involving the consistent pairing of two stimuli, where a reaction initially triggered by the second stimulus ultimately becomes triggered by the first stimulus alone.

Stimulus Eliciting

A process by which a specific stimulus provokes a response or reaction in an organism or system.

Response Paired

A concept in conditioning where a specific stimulus is repeatedly and consistently followed by a particular response.