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If New Information Becomes Available Indicating That a Company's Profits

Question 43

Multiple Choice

If new information becomes available indicating that a company's profits will be much less than previously believed, the flow of funds into the market for its securities will decline


A) unless the expected real interest rate on its securities rises.
B) unless the expected real interest rate on its securities falls.
C) unless the expected real interest rate on its securities remains unchanged.
D) irrespective of changes in the expected real interest rate on its securities.

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