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:

Controlled Experiment

A scientific test in which only one variable is changed at a time to isolate and measure its effect accurately.

Real-Life Effects

Actual impacts or outcomes that occur in everyday life, outside of controlled or experimental settings.

Sociologists

Social scientists who study human societies, their interactions, and the processes that preserve and change them, including cultural norms, organizations, and institutions.

Gather Data

The process of collecting information or facts from different sources for a specific purpose, often used in research and analysis.