Increased uncertainty resulting from the subprime crisis ________ the required return on investment in equity.
A)raised
B)lowered
C)had no impact on
D)decreased

Question

Quizplus · Accepted Answer

Increased uncertainty typically leads to higher risk perception among investors, which in turn, leads to increased required return on investments in equity. This means that investors will demand more return to compensate for the higher risk they are taking on, thereby pushing up the required rate of return.

Increased Uncertainty Resulting from the Subprime Crisis ________ the Required