Business

Madeleine Conrad

24 August, 10:05

If the expected return is above the required return on an asset, rational investors will:

A. buy the asset, since price is expected to increase.

B. buy the asset, which will drive the price up and push the expected return to drop to the level of the required return.

C. sell the asset, which will drive the price down and cause the expected return to reach the level of the required return.

D. buy the asset, which will drive the price down and cause the expected return to reach the level of the required return.