Stock prices are not likely to increase if
A) investors expect long-run earnings to increase.
B) investors come to accept a higher level of risk.
C) investors become more risk averse.
D) interest rates decrease.

Question

Quizplus · Accepted Answer

Investors becoming more risk-averse means they are less likely to invest in stocks, which can lead to a decrease in stock prices as demand for stocks falls.

Stock Prices Are Not Likely to Increase If