Return and risk are the key determinants in share price. Increased return results in_________ , other things remaining the same.
A) an unchanged share price
B) a lower share price
C) a higher share price
D) an undetermined share price

Question

Quizplus · Accepted Answer

Increased return, which means higher potential profits, leads to more demand for the stock, which in turn drives up its price. This is the basic law of supply and demand in the stock market - when demand is high, prices go up, and when demand is low, prices go down. Therefore, a higher return generally results in a higher share price.

Return and Risk Are the Key Determinants in Share Price