Suppose That a Particular Theory Predicts That on Monday,Wednesday,and Friday

question 62

Multiple Choice

Suppose that a particular theory predicts that on Monday,Wednesday,and Friday the stock market will rise and that on Tuesday and Thursday the stock market will fall.If an economist tests this theory and finds that over a six-month period the theory predicts accurately,the economist would likely say that the theory

• A)has been proven correct.
• B)is reliable.
• C)is not in conflict with the evidence.
• D)shouldn't be taken seriously.
• E)is not useful because stock markets involve irrational human behaviour.

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Definitions:

Current Value

The present worth of an asset or company based on market prices, as opposed to historical cost or book value; often used in gauging financial performance.

Existing Stock

The shares that are currently issued and outstanding in the market, referring to the stock previously sold to and held by the shareholders.

Long-Term Loan

A long-term loan is a financial obligation with a repayment period exceeding one year, often used for significant investments or purchases.