Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For a stock to be in equilibrium, that is, for there to be no long-term pressure for its price to depart from its current level,
For a stock to be in equilibrium, that is, for there to be no long-term pressure for its price to depart from its current level, then
a. | the required return must equal the realized return in all periods. | |
b. | the expected return must be equal to both the required future return and the past realized return. | |
c. | the expected future returns must be equal to the required return. | |
d. | the past realized return must be equal to the expected return during the same period. | |
e. | the expected future return must be less than the most recent past realized return. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started