According to the Efficient-Market Hypothesis, Changes in Stock Prices

question 67

Multiple Choice

According to the efficient-market hypothesis, changes in stock prices:

• A)follow a random walk.
• B)can be predicted from available information.
• C)are driven by irrational waves of optimism and pessimism.
• D)are based on what investors expect other investors to pay.

Perform basic arithmetic operations and ratio simplifications in various financial contexts.

Calculate the allocation of total overhead based on proportional usage.

Understand the impact of currency strengthening or weakening on international transactions.

Understand the duties and failures of directors and officers in corporate governance.

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Definitions:

Spotlight Effect

The tendency to overestimate the extent to which our actions and appearance are noticed and evaluated by others.

Negative-emotion Words

Words that convey or evoke feelings of sadness, anger, fear, or other negative emotional states, often analyzed in psychological studies of emotion and language.

Big Five

represents a model outlining five broad dimensions of personality traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism, used to describe human personality.

Neuroticism

An attribute of someone's personality distinguished by their tendency towards fluctuating emotions, nervousness, a moody disposition, anxiety, and feelings of gloom.