The Market for a Stock Is Said to Be in Equilibrium

question 50

Multiple Choice

The market for a stock is said to be in equilibrium when the _____. 

• A)expected return on the stock is equal to its required return
• B)expected return on the stock is equal to the risk-free rate of return
• C)expected return on the stock is equal to the market risk premium
• D)expected return on the stock is equal to the market return
• E)expected return on the stock is equal to its historical return

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Definitions:

Withdrawal

The act of removing funds from an account, or the act of removing capital from a business by its owner.

Environmental Assessment

The process of evaluating the potential environmental impacts of a planned project or development before decisions are made.

Strategic Management

The process of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Analyzing

The process of examining financial data to understand the state of a business, spot trends, or make decisions.