Over time,the unexpected return on a company's stock is expected to equal
A)zero.
B)the risk-free rate.
C)the company's average rate of return.
D)the market risk premium.
E)the average return on the overall market.

Question

Quizplus · Accepted Answer

The unexpected return on a company's stock is, by definition, random and unpredictable. Over time, these random fluctuations are expected to average out to zero, as positive and negative surprises offset each other.

Over Time,the Unexpected Return on a Company's Stock Is Expected