Stock A and B are identical in terms of their expected cash flows. Investors like...
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Stock A and B are identical in terms of their expected cash flows. Investors like stock A more than stock B today for reasons unrelated to expected cash flows. They should pay ______ price today to buy A than to buy B. As a result, stock A is expected to have _______ expected return than stock B.
Lower, Lower
Higher; Higher
Higher; Lower
Lower, Higher
Stock A and B are identical in terms of their expected cash flows. Investors like stock A more than stock B today for reasons unrelated to expected cash flows. They should pay ______ price today to buy A than to buy B. As a result, stock A is expected to have _______ expected return than stock B.
| Lower, Lower | ||
| Higher; Higher | ||
| Higher; Lower | ||
| Lower, Higher |
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