To Say That Stock Prices Follow a "Random Walk" Is

question 26

Multiple Choice

To say that stock prices follow a "random walk" is to argue that stock prices

• A)rise,then fall,then rise again.
• B)rise,then fall in a predictable fashion.
• C)tend to follow trends.
• D)cannot be predicted based on past trends.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the United States to ensure financial statements are consistent and comparable.

Freight-out

The cost associated with transporting goods from the seller to the buyer, usually considered a selling expense.

Purchase Returns

Goods returned to the supplier from the buyer, often due to defects or other reasons for dissatisfaction.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the previous period's closing inventory.