The larger the variance, the smaller the dispersion.
Indicate whether the statement is true or false.
Question 2
If expected return is less than required return on an asset, rational investors will:
A) Buy the asset, which will drive the price up and cause expected return to reach the required return.
B) Sell the asset, which will drive the price down and cause the expected return to rise.
C) Sell the asset, which will drive the price up and cause the expected return to drop.
D) Buy the asset, since price is expected to increase.
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