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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
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the expected future return must be less than the most recent past realized return. | |
the past realized return must be equal to the expected return during the same period. | |
the required return must equal the realized return in all periods. | |
the expected return must be equal to both the required future return and the past realized return. | |
the expected future return must be equal to the required return. |
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