Comparing a stock’s required return (RR) to its expected return (ER),

Comparing a stock’s required return (RR) to its expected return (ER), we can say

A)

the stock is a good buy when they are equal.
B)

that each represents a different concept and, so, they may have quite different values.
C)

they are simply different perspectives on the same concept and, so, they should have the same value.
D)

the stock is a good buy only when RR is greater than ER.

ANSWER

B