For markets to be in equilibrium (that is, for there to be no strong pressure for prices to depart from their current levels) ,
A) The past realized rate of return must be equal to the expected rate of return; that is,
.
B) The required rate of return must equal the realized rate of return; that is, r =
.
C) All companies must pay dividends.
D) No companies can be in danger of declaring bankruptcy.
E) The expected rate of return must be equal to the required rate of return; that is,
= r.
Correct Answer:
Verified
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