The Idea That Investors in a Common Stock May Expect

question 58

Multiple Choice

The idea that investors in a common stock may expect a lower total return if they purchase a stock with limited price volatility rather than one with high price volatility suggests that:

• A) investors are irrational.
• B) there is a relationship between risk and return.
• C) real rates of return will be lower during periods of price stability.
• D)stocks should be avoided when inflation is low.

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Definitions:

Table

An arrangement of data made up of horizontal rows and vertical columns, often used to organize and present information in a structured format.

Property Sheet

A user interface element in software applications that displays and allows editing of the properties of an object.

Relationships Window

A portion of database software that displays how tables are interconnected through their keys and relationships.

Number Field

an input field specifically designed for the entry of numerical values in forms or databases.