If You Believe That Stock Prices Follow a Random Walk,then

question 10

Multiple Choice

If you believe that stock prices follow a random walk,then probably you

• A)do not believe that there is positive relationship between risk and return.
• B)do not believe that stock prices reflect all available information.
• C)believe in the validity of the efficient markets hypothesis.
• D)believe that it is a good idea to engage in fundamental analysis.

---

Definitions:

Period Costs

Costs that are not directly tied to the production process and are expensed in the period they are incurred, such as selling, general, and administrative expenses.

Administrative Costs

Expenses related to the general administration of a business, including salaries of executives, office supplies, and legal and accounting services.

Indirect Costs

Costs that cannot be directly linked to the production or sale of specific goods or services, like utilities or administrative salaries.

Advertising

The activity or profession of producing advertisements for commercial products or services.