To Say That Stock Prices Follow a "Random Walk" Is

question 26

Multiple Choice

To say that stock prices follow a "random walk" is to argue that stock prices

• A)rise,then fall,then rise again.
• B)rise,then fall in a predictable fashion.
• C)tend to follow trends.
• D)cannot be predicted based on past trends.

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Definitions:

Normal Capacity

The average level of production that a company can sustain under normal circumstances, considering limitations like time and resources.

Factory Overhead

Refers to the indirect manufacturing costs not directly tied to the production of the product, such as maintenance, utilities, and salary of non-direct labor.

Fixed Factory Overhead Volume Variance

The difference between the budgeted amount for fixed factory overhead and the amount applied to production, based on standard cost.

Direct Materials Quantity Variance

A financial measure that shows the difference between the actual quantity of materials used and the standard quantity expected for production.