You, in analyzing a stock, find that its expected return exceeds its required return.This suggests that you think

Question

Quizplus · Accepted Answer

When the expected return of a stock exceeds its required return, it means that the stock is undervalued or underpriced in the market. This creates an opportunity for investors to purchase the stock at a lower price than its actual worth and earn a higher return in the future. Therefore, the stock is a good buy.

You, in Analyzing a Stock, Find That Its Expected Return