The Random Walk Theory Indicates That

question 365

Multiple Choice

The random walk theory indicates that

• A) investors can make money by purchasing stocks that are widely expected to earn substantial profits in the future.
• B) while changes in the prices of specific stocks are difficult to predict, experts are able to forecast the future direction of broad stock market indexes with a high degree of accuracy.
• C) changes in stock prices are driven by surprise occurrences that are difficult for anyone to predict accurately.
• D) managed mutual funds will persistently outperform indexed funds.

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Definitions:

Communication

The act of conveying information, ideas, emotions, or instructions through verbal, nonverbal, written, or visual means between entities.

Goals

Targets or outcomes that a person or an organization aims to achieve through planned actions.

Virtual Organization

An organization that operates primarily through electronic communication without a fixed physical location.

Multidivisional

A structure involving multiple, semi-independent divisions within an organization, each focused on a specific aspect of the organization's operations.