Changes in Stock Prices Occur Because Investors Change the Rates

question 51

True/False

Changes in stock prices occur because investors change the rates of return they require to invest in stocks and/or the expectations about the cash flows associated with stocks change. 

---

Definitions:

Dishabituation

is the renewed response to a stimulus after habituation has occurred, typically due to a novel stimulus interrupting the habituation process.

B State

A concept in psychology that refers to an individual's internal state, such as mood or emotion, which can affect behavior and perception.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, responsible for processing information and controlling responses.

Habituation

The decreasing responsiveness to a stimulus after repeated exposure.