Which of the following is true?
A) In equilibrium, the risk-adjusted return to owning stock will be equal to the risk-adjusted return to owning bonds.
B) The risk-adjusted return to owning stock is the nominal return less compensation for the higher risk of owning stock.
C) In equilibrium, differences in returns on various financial instruments represent only differences in risk and liquidity.
D) All of the above are true.
Correct Answer:
Verified
Q59: The theory of rational expectations is the
Q60: The optimal forecast is the best guess
Q61: An implication of rational expectations is that
Q62: The efficient market hypothesis states that when
Q63: Financial markets are in equilibrium when the
Q65: The rationale behind the efficient markets hypothesis
Q66: Market fundamentals are factors that have a
A)direct
Q67: The flow of funds is a social
Q68: Sources of funds for any sector are
A)spending
Q69: Uses of funds for any sector are
A)past
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents