​The Value of a Stock May Increase If

question 21

Multiple Choice

​The value of a stock may increase if
1) risk is increased
2) risk is decreased
3) investors' required rate of return increases
4) investors' required rate of return decreases

• A)​1 and 3
• B)​1 and 4
• C)​2 and 3
• D)​2 and 4

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Definitions:

Unemployment

A measure of the number of people who are actively looking for work but aren't currently employed.

Cyclical Unemployment

Unemployment that is linked to the cyclical trends in the economy, typically increasing during recessions and decreasing during expansions.

Economy

The system by which goods and services are produced, distributed, and consumed within a particular country or area.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of money.