Question

Which of the following is expected for a stock whose expected return is less than its required return? a. The stock's price will go up. b. The stock's price will stay the same. c. The stock's price will go down. d. The stock's expected return will increase. e. Both C and D are expected.

Answer 1

The answer is option E

Step-by-step explanation:

For a stock whose expected return is less that its required return, the stock's price will go down and the stock's expected return will increase.

Hence option E is the correct option

Answer 2

E. Both C and D are expected.