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.

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Definitions:

Central

Pertaining to the main or most important part of something; often used in psychology to describe core processes or systems.

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for conserving energy and returning the body to a restful state after stress or activity.

Sympathetic Nervous System

A part of the autonomic nervous system that activates what is often termed the fight or flight response.

Somatic Nervous System

The part of the peripheral nervous system responsible for voluntary muscle movement and the reception of external stimuli.