If Expected Return Is Less Than Required Return on an Asset

question 6

Multiple Choice

If expected return is less than required return on an asset, rational investors will ________.

• A) buy the asset, which will drive the price up and cause expected return to reach the level of the required return
• B) sell the asset, which will drive the price down and cause the expected return to reach the level of the required return
• C) sell the asset, which will drive the price up and cause the expected return to reach the level of the required return
• D) buy the asset, since price is expected to increase

Recognize the contributions of key figures in the management field, such as Frederick W. Taylor, Henri Fayol, and Abraham Maslow.

Analyze the importance of efficiency, predictability, and long-term planning in management practices.

Understand the significance of human relations and people orientation in supervision and management.

Analyze the role of supervision in supporting employees' personal needs while being productive.

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Definitions:

Employment

The condition of having a job or being employed in a paid position.

Wage Rates

The amount of money paid to a worker per unit of time, such as hourly, daily, or monthly, often subject to negotiations between employers and employees or unions.

Research And Development

Research and Development (R&D) involves activities that companies undertake to innovate and introduce new products or services. It is a crucial component for growing and improving businesses.

Capital Goods

Long-term assets used in the production of goods and services, such as machinery, buildings, and equipment.