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The Control Function Includes Three Steps: Setting Standards, Measuring Performance

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The control function includes three steps: setting standards, measuring performance, and recycling the system.


Definitions:

Random Walk Theory

The theory that current stock prices already reflect known information about the future. Therefore, the future movement of stock prices will be determined by surprise occurrences. This will cause them to change in a random fashion.

Stock Prices

The current market price of a company's shares, determined by supply and demand factors in the stock market.

Beginning Investors

Individuals who are new to investing, typically requiring guidance and learning about investment strategies and market principles.

Average Real Rate Of Return

The annualized rate of return on an investment, adjusted for inflation, reflecting the actual buying power of the returns.

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