If You Believe That Stock Market Prices Follow a Random

question 80

Multiple Choice

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

• A)historical price information provides no benefit in predicting future prices.
• B)there is no financial benefit from investing in the stock market.
• C)having inside information will not lead to abnormal profits.
• D)studying past price movements will lead to abnormal profits.
• E)you also believe the market is strong form efficient.

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Definitions:

Valence Shells

The outermost shell of an atom that contains the electrons involved in forming bonds.

Noble Gas Elements

Elements in group 18 of the periodic table, known for their lack of reactivity due to having full valence electron shells.

Electrons

Negatively charged subatomic particles found in all atoms, orbiting the nucleus and involved in chemical bonds and electricity.

Octet Rule

A chemical rule of thumb that atoms of main-group elements tend to combine in such a way that each atom has eight electrons in its valence shell, giving it the same electron configuration as a noble gas.