When markets are in equilibrium-required return

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Reference no: EM131449050

When markets are in equilibrium, required return and expected return are the same because.

A. Money managers and investors would buy stocks whose required return is higher than its expected return and such activity would continue until the discrepancy between the two has been eliminated.

B. Money managers and investors would buy stocks whose required return is lower than its expected return and such activity would continue until the descrepancy between the two has been eliminated.

C. Money managers and investors would sell stocks whose required return is higher than its expected return and such activity would continue until the discrepancy between the two has been eliminated.

D. Both B and C

Reference no: EM131449050

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