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

question 114

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 the above statements is correct.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, which represents the profitability of selling goods.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core activities.

Traditional Format

An accounting income statement format that categorizes costs by their function, such as cost of goods sold, operating expenses, and other expenses.

Fixed Cost

Costs that remain constant in total regardless of changes in the level of production or sales activity.