According to the Random Walk Theory

question 281

Multiple Choice

According to the random walk theory

• A) today's stock price will be related to yesterday's stock price.
• B) successive prices of a stock are independent of each other.
• C) stock prices can easily be predicted for as much as 52 weeks into the future.
• D) stock prices rise and fall in predictable cycles that correspond with the overall business cycle.

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Definitions:

Ratio

A relationship in numbers expressing the frequency with which one value encompasses or is encompassed by another.

Lowest Terms

The simplest form of a fraction when both the numerator and denominator cannot be any smaller while still being whole numbers.

Ratio

An arithmetic ratio that illustrates the frequency with which one number incorporates another, depicting how many times one value is contained within another.

Equivalent Ratio

Ratios that express the same relationship between numbers, despite being scaled differently.