If You Believe That Stock Prices Follow a Random Walk,then

question 10

Multiple Choice

If you believe that stock prices follow a random walk,then probably you

• A)do not believe that there is positive relationship between risk and return.
• B)do not believe that stock prices reflect all available information.
• C)believe in the validity of the efficient markets hypothesis.
• D)believe that it is a good idea to engage in fundamental analysis.

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Definitions:

Outside

External or beyond the limits or confines of a specific area or context.

Proactive Behaviours

Actions taken by individuals that are anticipatory and change-oriented, aimed at affecting positive change in the environment or in oneself.

Proximal Outcomes

Immediate effects or results that can be directly attributed to specific actions or interventions.

Distal Outcomes

Results or consequences that occur over a long period of time or are removed from the immediate cause-and-effect relationship.