Assume that there are two investments very similar in all respects, but Investment X has a higher rate of return than does Investment Y. As a result of the arbitrage process, the price of Investment
A. X will fall and its rate of return will fall
B. Y will rise and its rate of return will fall
C. X will fall and its rate of return will rise
D. Y will fall and its rate of return will rise
D. Y will fall and its rate of return will rise
You might also like to view...
A tax on the sellers of coffee mugs
a. increases the size of the coffee mug market. b. decreases the size of the coffee mug market. c. has no effect on the size of the coffee mug market. d. may increase, decrease, or have no effect on the size of the coffee mug market.
If the amount of money in circulation is $180 billion and the value of the economy's total output is $540 billion, then the:
A. circulation period of money must be one-fourth of a year. B. velocity of money is 4. C. average price per final good sold is $3. D. velocity of money is 3.