The Theory That There Are No Predictable Trends in Securities

question 213

Multiple Choice

The theory that there are no predictable trends in securities prices that can be used to "get rich quick" is the

• A) dartboard theory.
• B) random walk theory.
• C) Wall Street theory.
• D) inefficient market hypothesis.

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Definitions:

Maximax Strategy

A decision-making approach focused on maximizing the maximum possible payoff, suitable for optimistic decision-makers.

Maximin Criterion

A decision rule used in statistics, economics, and game theory that selects the action which has the highest minimum payoff.

States of Nature

Possible outcomes or situations in decision-making under uncertainty that affect the results of different decisions but are beyond the control of the decision-maker.

Manufacturing Alternatives

Different methods or approaches available for the production of goods, considering factors like cost, technology, and resource availability.