If the earnings yield on a large number of stocks is less than the default risk free bond, investors are likely to buy stock.

Name: If the earnings yield on a large number of stocks is less than the default risk free bond, investors are likely to buy stock.
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Question

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If the earnings yield on stocks is less than the yield on risk-free bonds, investors are likely to prefer the bonds because they offer a higher return for no risk, making them more attractive compared to stocks.

If the Earnings Yield on a Large Number of Stocks