Suppose a Stock Has a Lower Expected Rate of Return

Multiple Choice

Suppose a stock has a lower expected rate of return than a bank account. Then

A) there will be an excess supply of the stock and its price will rise.
B) there will be an excess supply of the stock and its price will fall.
C) there will be an excess demand for the stock and its price will rise.
D) individuals will choose indifferently between the stock and the bank account.
E) risk-averse individuals will prefer the stock.