Security Prices Are Said to Follow a "Random Walk," Which

question 128

Multiple Choice

Security prices are said to follow a "random walk," which means that:

• A)Stock selection for portfolio composition is unimportant
• B)It is impossible to know whether stocks offer higher returns than bonds
• C)Investment analysts are unnecessary
• D)Successive price changes are unpredictable

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Definitions:

Behavior Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through stimulus-response conditioning techniques.

Cognitive Therapy

A form of psychotherapy that focuses on changing negative thoughts and beliefs to improve emotional well-being and behavior.

Rational-Emotive Therapists

Professionals who apply Rational Emotive Behavior Therapy (REBT), focusing on identifying irrational beliefs, challenging these beliefs, and encouraging rational thinking to promote emotional well-being.

Irrational Beliefs

Concepts or thoughts that lack logical reasoning or factual evidence, often leading to negative emotional outcomes or behaviors.