Suppose Stock a Sells for $30 Per Share and Pays

question 187

Multiple Choice

Suppose stock A sells for $30 per share and pays dividends of $1 per share per year. Stock B sells for $40 per share and pays dividends of $2 per share per year. Through the process of arbitrage,
We would expect the price of

• A) stock A to fall and/or the price of stock B to rise.
• B) stock A to rise and/or the price of stock B to fall.
• C) both stocks to rise or fall together.
• D) neither stock to change.

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Definitions:

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The part of the body that coordinates its voluntary and involuntary actions and transmits signals to and from different parts of its body.

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Electrically excitable cells in the nervous system that process and transmit information through electrical and chemical signals.

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The process of conveying information or expressing thoughts and feelings through verbal or non-verbal means.

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Plastic materials that have been collected, processed, and manufactured into new products after being disposed of as waste.