If Stock Prices Follow a Random Walk

question 11

Multiple Choice

If stock prices follow a random walk,

• A)it implies that investors are irrational.
• B)it means that the market cannot be efficient.
• C)price levels are not random.
• D)price changes are random.

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Definitions:

Bloodstream

The flowing blood within the circulatory system of the body, carrying oxygen, nutrients, and waste products to and from the cells.

Colitis

Colitis is the inflammation of the inner lining of the colon and is associated with symptoms like abdominal pain, cramping, and diarrhea.

Colon

The part of the large intestine, extending from the cecum to the rectum, that absorbs water and salts from food remnants.

Inflammation

A biological response to injury or infection, resulting in redness, warmth, swelling, and pain in the affected area.