The Efficient Markets Hypothesis Predicts That Stock Prices Follow a "Random

question 32

Multiple Choice

The efficient markets hypothesis predicts that stock prices follow a "random walk." The implication of this hypothesis for investing in stocks is

• A)a "churning strategy" of buying and selling often to catch market swings.
• B)turning over your stock portfolio each month,selecting stocks by throwing darts at the stock page.
• C)a "buy and hold strategy" of holding stocks to avoid brokerage commissions.
• D)following the advice of technical analysts.

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Definitions:

Net 30

A payment term indicating that full payment is due within 30 days of the invoice date.

Terms

Conditions and parameters under which credit is extended by a lender to a borrower, including the repayment schedule, interest rate, and maturity date.

Cost of Trade Credit

The cost associated with the terms of credit extended by suppliers, including discounts for early payment and penalties for late payment.

Paying Late

Paying late refers to the action of failing to meet the due date for a financial obligation, which can lead to late fees, interest charges, and negative impacts on credit scores.