An increase in an asset's expected return relative to that of an alternative asset,holding everything else constant,________ the quantity demanded of the asset.
A)increases
B)decreases
C)has no effect on
D)erases

Question

Quizplus · Accepted Answer

According to the law of demand, an increase in the expected return of an asset relative to an alternative will make the asset more desirable, thus increasing the quantity demanded. Therefore, an increase in the expected return relative to an alternative asset increases the quantity demanded of the asset.

An Increase in an Asset's Expected Return Relative to That