If Markets Are in Equilibrium, Which of the Following Conditions

question 106

Multiple Choice

If markets are in equilibrium, which of the following conditions will exist?

• A) Each stock's expected return should equal its required return as seen by the marginal investor.
• B) All stocks should have the same expected return as seen by the marginal investor.
• C) The expected and required returns on stocks and bonds should be equal.
• D) All stocks should have the same realized return during the coming year.
• E) Each stock's expected return should equal its realized return as seen by the marginal investor.

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Definitions:

Acting Out

Expressing unconscious emotional conflicts or feelings through actions rather than words, often negatively.

Anticipatory Grieving

The process of grieving in advance of an impending loss, such as the expected death of a loved one due to a terminal illness.

AIDS

Acquired Immunodeficiency Syndrome, a disease caused by HIV that severely weakens the immune system.

Scapegoating

The act of unjustly blaming or punishing a person or group for problems or adverse events, often used to deflect responsibility or criticism.