If the expected rate of return on a stock is lower than the required rate of return what is false in the followings? a. The stock market is not in equilibrium b. Relevant information is not fully re...
If the expected rate of return on a stock is lower than the
required rate of return what is false in the followings?
a. The stock market is not in equilibrium
b. Relevant information is not fully reflected
c. The stock is unpriced
d. The stock price will change soon
Homework Answers
| The following statement is false: | |||||
| c) The stock is unpriced. | |||||
| The expected return is lower than the required rate | |||||
| of return implies that the stock is overvalued. | |||||
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