If the Stock Price Follows a Random Walk, Successive Price

question 2

Multiple Choice

If the stock price follows a random walk, successive price changes are statistically independent. If σ² is the variance of the daily price change, and there are t days until expiration, the variance of the cumulative price change is

• A)σ²
• B)(σ²)× (t).
• C)(σ²)/t.
• D)(σ²)× (t²).

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Definitions:

Positive Self-Regard

A person's overall subjective emotional evaluation of their own worth or the attitude towards oneself in a positive manner.

Unconditional Positive Regard

A therapeutic concept where a therapist accepts and supports a client without judgment, regardless of the client's actions or feelings.

Collective Unconscious

A concept in psychology proposing the existence of shared, universal psychic structures inherited among people, proposed by Carl Jung.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions, often through art, conversation, or other expressive activities.