The price of a stock will increase,ceteris paribus,when
A)Future earnings expectations increase.
B)The interest rate increases.
C)The supply of the stock increases.
D)There is a surplus of the stock at the current price.

Question

Quizplus · Accepted Answer

When future earnings expectations increase, people are more likely to invest in the stock, leading to an increase in demand and therefore an increase in price. None of the other options are likely to lead to an increase in stock price.

The Price of a Stock Will Increase,ceteris Paribus,when