Everything else held constant, if the expected return on bonds falls from 10 to 5 percent and the expected relative return on GE stock rises from 7 to 8 percent, then the expected return of holding GE stock to bonds and the demand for GE stock falls; rises. rises; falls rises; rises. falls; falls

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter27: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
Problem 6CQ
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Everything else held constant, if the expected return on bonds falls from 10 to 5 percent and the expected
relative
return on GE stock rises from 7 to 8 percent, then the expected return of holding GE stock
to bonds and the demand for GE stock
falls; rises.
rises; falls
rises; rises.
falls; falls
Transcribed Image Text:Everything else held constant, if the expected return on bonds falls from 10 to 5 percent and the expected relative return on GE stock rises from 7 to 8 percent, then the expected return of holding GE stock to bonds and the demand for GE stock falls; rises. rises; falls rises; rises. falls; falls
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