Asked by Amina Shermatova on May 29, 2024
Verified
In equilibrium,high risk stocks would typically be accompanied by
A) low returns
B) no returns
C) high returns
D) no sales-no one would buy risky stocks
High Risk Stocks
Equity investments that have a high potential for loss but also offer the possibility of significant returns.
High Returns
Investments or financial assets that yield a significantly higher than average rate of return or profit.
Equilibrium
A state in which market supply and demand balance each other, resulting in stable prices and quantities.
- Understand the balance that investors strive for between risk and return features of assets in terms of equilibrium behavior.
Verified Answer
EC
Esmeralda ColonJun 01, 2024
Final Answer :
C
Explanation :
High risk stocks would typically be accompanied by high returns in equilibrium, as investors require a higher return to compensate for the additional risk they are taking on.
Learning Objectives
- Understand the balance that investors strive for between risk and return features of assets in terms of equilibrium behavior.
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