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    Principles of Economics Study Set 12
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    Exam 16: Capital and Financial Markets
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    Suppose a Stock Has the Same Expected Rate of Return
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Suppose a Stock Has the Same Expected Rate of Return

Question 123

Question 123

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Suppose a stock has the same expected rate of return as a bank account. Explain why this is not an equilibrium situation.

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The stock is more risky, so all risk-ave...

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