The price of a stock will decline if its expected rate of return is less than the interest on a bank account.

Name: The price of a stock will decline if its expected rate of return is less than the interest on a bank account.
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Question

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If the expected rate of return on a stock is less than the interest rate offered by a bank account, investors are likely to prefer the safer bank account option, leading to a decrease in demand for the stock and thus a decline in its price.

The Price of a Stock Will Decline If Its Expected