Ceteris paribus,the price of a stock will definitely increase when the
A)Supply of the stock increases.
B)Prevailing interest rate increases.
C)Demand for the stock increases.
D)Demand for the stock and supply of the stock both decrease.

Question

Quizplus · Accepted Answer

According to the law of demand, when the demand for a stock increases, its price will increase as well. Therefore, ceteris paribus, the price of a stock will definitely increase when the demand for the stock increases. None of the other options provided would directly lead to an increase in the price of a stock.

Ceteris Paribus,the Price of a Stock Will Definitely Increase When