Which One of the Following Will Automatically Occur If All

question 43

Multiple Choice

Which one of the following will automatically occur if all investors are rational?

• A)All stock prices will be equal.
• B)Equivalent risk assets will have equal expected rates of return.
• C)All investors will earn the market rate of return.
• D)All investors will earn the same rate of return.
• E)The riskier an asset, the higher its market price will be.

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Definitions:

Defender Strategy

A business strategy focusing on defending existing market niches, maintaining stable growth, and protecting market share from competitors.

Adaptation Model

The adaptation model is one popular approach to business strategy where a business seeks ways to adapt to its environment.

Little Uncertainty

Situations in which outcomes or expectations are relatively clear and predictable, minimizing the need for guesswork or speculation.

Personality

Is the relatively stable set of psychological attributes or traits that distinguish one person from another. Some organizations believe that one or more particular personality traits may relate to how well an employee can perform a certain job or type of job.