Which of the Following Is True

question 47

Multiple Choice

Which of the following is true?

• A)The prices of stocks and bonds adjust until the average investor is indifferent between stocks or bonds--in other words, until the risk adjusted returns to owning stocks or bonds are equalized.
• B)The equilibrium return to owning stocks consists of a risk free return, a risk premium for owning stock, and a firm specific premium.
• C)If the Fed takes action that causes interest rates to change, this changes the risk free return of government bonds, and financial prices of stocks and bonds adjust until the investor is again indifferent between stocks and bonds.
• D)All of the above are true.

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Definitions:

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The voluntary or involuntary movement of the eyes, aiding in visual tracking, and scanning of the environment.

Psychological Research

The systematic investigation of mental processes, behavior, and phenomena using empirical methods and scientific principles to understand, predict, and enhance human experience.

Complex Sentences

Sentences that contain one independent clause and at least one dependent clause, often used to convey detailed or nuanced information.

Function Morphemes

Grammatical units that serve to express grammatical relationships or functions rather than concrete meanings.