Suppose That a Particular Theory Predicts That on Monday, Wednesday

question 82

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 not rejected by the evidence.
• C)is not useful because stock markets involve irrational human behaviour.
• D)is reliable.
• E)shouldn't be taken seriously.

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Definitions:

Fiduciary Duty

A legal obligation to act in the best interest of another party, typically involving a relationship of trust, such as between a trustee and the beneficiaries of the trust.

Financial Risk

The possibility of losing financial capital due to market fluctuations, operational failures, or other external events.

Real Estate Development

The process of purchasing land, financing real estate deals, building or having builders construct projects, and ultimately selling the developed property.

Duty of Care

A legal obligation imposed on an individual requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others.