For Markets to Be in Equilibrium,that Is,for There to Be

question 38

Multiple Choice

For markets to be in equilibrium,that is,for there to be no strong pressure for prices to depart from their current levels,

• A)The expected rate of return must be equal to the required rate of return; that is, .
• B)The past realized rate of return must be equal to the expected future rate of return; that is, .
• C)The required rate of return must equal the past realized rate of return; that is, .
• D)All three of the above statements must hold for equilibrium to exist; that is, .
• E)None of these statements is correct.

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Definitions:

Operating Segment

A component of a business that engages in business activities from which it may earn revenues and incur expenses, identifiable by distinct financial information.

Disclosure Guidelines

Regulations or standards that dictate the financial information a company must provide to stakeholders to ensure transparency and informed decision-making.

Operating Segment

A component of an enterprise, engaged in business activities from which it may earn revenues and incur expenses.

Consistency

An accounting principle that requires accounting methods and principles to be applied in the same manner from period to period unless a change is justified.