What Can Be Expected to Happen When Stocks Having the Same

question 3

Multiple Choice

What can be expected to happen when stocks having the same expected risk do not have the same expected return?

• A)at least one of the stocks becomes temporarily mispriced
• B)this is a common occurrence indicating that one stock has more PRESENT VALUE OF GROWTH OPPORTUNITIES
• C)this cannot happen if the shares are traded in an auction market
• D)the expected risk levels will change until the expected returns are equal

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Definitions:

Perform A Dance

Perform a dance involves executing choreographed movements to music, expressing artistry, emotion, or cultural traditions through bodily motion.

Run Fast

The ability to move quickly on foot, typically at a speed that significantly exceeds walking pace.

6 Years Old

A developmental stage typically associated with early childhood, characterized by significant growth in physical, cognitive, and social abilities.

95th Percentile

A statistical measure indicating that 95% of the observed values fall below this point, often used to denote high performance or an outlier status.