- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 21. Return Concepts
- Subject 1. Return Concepts
CFA Practice Question
If the investor's expected return falls short of the required return,
A. The asset will appear to be undervalued.
B. The asset will appear to be overvalued.
C. We cannot draw any conclusion since the two returns are not related.
Explanation: The asset is expected to return less-than-fair compensation for the asset's risk.
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