All else equal,a higher required rate of return on a financial asset results in a higher price for that asset.

Question

Quizplus · Accepted Answer

A higher required rate of return indicates that investors are demanding a higher compensation for the risk associated with the asset. This makes the asset less attractive, lowering its demand and price. Conversely, a lower required rate of return will increase the demand for the asset, resulting in a higher price.

All Else Equal,a Higher Required Rate of Return on a Financial