For the question below, clearly STATE which of the choice(s) is/are CORRECT and which are INCORRECT? If a statement is incorrect, you must briefly explain why. Note: You can write several full sentences in the answer boxes but keep the explanations to 5-30 words). Ques: For markets to be in equilibrium/efficient (that is, for all current information be incorporated into stock prices), a. The expected rate of return must be equal to the required rate of return. b. The past realized rate of return must be equal to the expected rate of return. c. The required rate of return must equal the realized rate of return. d. All three of the above statements must hold for equilibrium to exist.
For the question below, clearly STATE which of the choice(s) is/are CORRECT and which are INCORRECT? If a statement is incorrect, you must briefly explain why. Note: You can write several full sentences in the answer boxes but keep the explanations to 5-30 words). Ques: For markets to be in equilibrium/efficient (that is, for all current information be incorporated into stock prices), a. The expected rate of return must be equal to the required rate of return. b. The past realized rate of return must be equal to the expected rate of return. c. The required rate of return must equal the realized rate of return. d. All three of the above statements must hold for equilibrium to exist.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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18
Transcribed Image Text:QUESTION 18
For the question below, clearly STATE which of the choice(s) is/are CORRECT and which are INCORRECT? If a statement is incorrect, you must briefly explain why.
(Note: You can write several full sentences in the answer boxes but keep the explanations to 5-30 words).
Ques: For markets to be in equilibrium/efficient (that is, for all current information be incorporated into stock prices),
a. The expected rate of return must be equal to the required rate of return.
b. The past realized rate of return must be equal to the expected rate of return.
c. The required rate of return must equal the realized rate of return.
d. All three of the above statements must hold for equilibrium to exist.
e. None of the above statements is correct.
QUESTION 19
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