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mixas84 [53]
3 years ago
14

What do you think would happen to the expected return on stocks if investors perceived an increase in the volatility of stocks?

Assuming no change in tastes, that is, an unchanged risk aversion, investors perceiving higher risk will demand a higher risk premium to hold the same portfolio they held before. If we assume that the risk-free rate is unaffected, the increase in the risk premium would require a (Click to select) expected rate of return in the equity market.
Business
1 answer:
olya-2409 [2.1K]3 years ago
4 0

Answer:

Higher is the correct answer.

Explanation:

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