Assuming that all else remains equal, when people become more optimistic about a company's future, what is most likely to happen to the company's stock?
A) The supply of the stock and the price will both rise.
B) The supply of the stock and the price will both fall.
C) The demand for the stock and the price will both rise.
D) The demand for the stock and the price will both fall.

Question

Quizplus · Accepted Answer

When people become more optimistic about a company's future, they are more likely to want to invest in the company, thereby increasing the demand for the stock. As demand for the stock increases, the price of the stock is also likely to increase. Therefore, the correct answer is C.

Assuming That All Else Remains Equal, When People Become More