If the Expected Return Is Above the Required Return on an Asset,rational

question 18

Multiple Choice

If the expected return is above the 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 required return.
• B) Sell the asset, which will drive the price down and cause the expected return to reach the required return.
• C) Sell the asset, which will drive the price up and cause the expected return to reach the required return.
• D) Sell the asset, since price is expected to decrease.

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Definitions:

Mean

The mean value of a group of numbers, found by dividing the aggregate of the numbers by how many numbers there are.

Difference

The result of subtracting one quantity from another, highlighting disparities or changes between them.

Random Samples

Selections made in such a way that each member of a population has an equal chance of being included in the sample.

Temporary Worker Productivity

The efficiency and output of workers employed on a temporary basis, often measured in terms of contributions to specific projects or tasks.