If a stock's required return exceeds its expected return,it should be purchased.

Name: If a stock's required return exceeds its expected return,it should be purchased.
Brand: Quizplus
Rating: 4.9 (55 reviews)

Question

Quizplus · Accepted Answer

This statement is incorrect. If a stock's required return exceeds its expected return, it suggests that the market perceives it as risky and may result in a lower stock price. It doesn't make sense to purchase a stock with an expected return lower than its required return as it would mean losing money on the investment.

If a Stock's Required Return Exceeds Its Expected Return,it Should