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:

Inventory Period

The time span between purchasing goods for sale and their eventual sale to customers.

Restrictive Financial Policies

Restrictive financial policies are measures implemented by a company to maintain financial stability and discipline, often involving limits on capital spending, borrowing, and dividend distributions.

Current Asset Management

The practice of managing a company's short-term assets and liabilities to ensure it has sufficient liquidity to run its operations efficiently.