Question: What do you think would happen to the equilibrium expected return on stocks if investors perceived higher volatility in the equity market? Relate your answer

 What do you think would happen to the equilibrium expected return

on stocks if investors perceived higher volatility in the equity market? Relate

What do you think would happen to the equilibrium expected return on stocks if investors perceived higher volatility in the equity market? Relate your answer to Equation 6.7. y=AP2E(rP)rf

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