Which of the following is NOT a true statement?
A)The capital gain yield measures the appreciation in the price of the asset from some starting price.
B)Common shares should lose from inflation over the long run as their prices and cash flows are not fixed.
C)The capital loss yield measures the depreciation in the price of the asset from the purchase price.
D)The addition of the capital gain (or loss)yield explains why the yield gap between equities and bonds has varied so much over time.

Question

Quizplus · Accepted Answer

Common shares can gain or lose due to inflation, depending on the company's ability to adjust prices and the demand for its products. Therefore, it is not always true that common shares should lose from inflation over the long run.

Which of the Following Is NOT a True Statement