A Random Walk

question 12

Multiple Choice

A random walk:

• A) suggests patterns from market cycles.
• B) allows for abnormal returns.
• C) suggests markets are not efficient.
• D) suggests non correlation between past and future price movements.

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Definitions:

ESOs

Stock options provided to employees within their salary package permit them to acquire shares in the company at a fixed price, serving as part of their overall compensation.

Company Stock

Equity shares issued by a company representing ownership interests, giving shareholders voting rights and a claim on the company’s profits in the form of dividends.

ESOs

Employee Stock Options; a form of equity compensation granted by companies to their employees and executives, allowing them to purchase company shares at a set price for a certain period.

Cash Wages

Payments made to employees in the form of physical currency or through direct deposits to their bank accounts as compensation for their labor.