The Efficient Markets Hypothesis Predicts That Stock Prices Follow a "Random

question 32

Multiple Choice

The efficient markets hypothesis predicts that stock prices follow a "random walk." The implication of this hypothesis for investing in stocks is

• A)a "churning strategy" of buying and selling often to catch market swings.
• B)turning over your stock portfolio each month,selecting stocks by throwing darts at the stock page.
• C)a "buy and hold strategy" of holding stocks to avoid brokerage commissions.
• D)following the advice of technical analysts.

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Definitions:

Generalized Anxiety Disorder

A chronic disorder characterized by excessive, long-lasting anxiety and worry not focused on any specific object or situation.

Id Impulses

Innate, primitive behaviors and urges that exist in the unconscious mind, according to Freudian psychology.

Existential Crisis

A moment at which an individual questions if their life has meaning, purpose, or value, sometimes leading to depression or anxiety.

Specific Phobias

Intense, irrational fears of specific objects or situations, significantly impacting an individual's daily life.