When Maurice Kendall Examined the Patterns of Stock Returns in 1953

question 38

Multiple Choice

When Maurice Kendall examined the patterns of stock returns in 1953, he concluded that the stock market was __________.Now, these random price movements are believed to be _________.

• A)inefficient; the effect of a well-functioning market
• B)efficient; the effect of an inefficient market
• C)inefficient; the effect of an inefficient market
• D)efficient; the effect of a well-functioning market

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Definitions:

Loss Aversion

A psychological phenomenon where individuals prefer avoiding losses to acquiring equivalent gains, indicating a greater sensitivity to losses than to gains.

Savings Increase

A rise in the amount of money set aside for future use, typically in a deposit account or investment vehicle.

Zero Percent Interest

Zero Percent Interest describes a financing or credit offer where no interest is charged on the principal amount for a specific period, typically used as a promotional strategy.

House Money Effect

The tendency of individuals to take higher risks when dealing with profits from previous bets or investments, as if playing with "house money."