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:

Language Tasks

Refers to various activities or exercises designed to assess or improve one's ability in a specific language, including writing, reading, speaking, and listening skills.

Individuals Disabilities Act

A law ensuring services to children with disabilities throughout the nation.

Free Education

A system where education is provided without charge to students, often funded by the government.

Public Schools

Educational institutions funded and administrated by the government, offering free education to students within a certain area.