If Stock Prices Follow a Random Walk

question 49

Multiple Choice

If stock prices follow a random walk

• A) it implies that investors are irrational.
• B) it means that the market cannot be efficient.
• C) price levels are random.
• D) price changes are random.
• E) price movements are predictable.

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Definitions:

Labor-Hour

A unit of measure representing an hour of work performed by an employee.

Fixed Overhead Volume Variance

The difference between the expected fixed overhead costs based on standard volume and the actual fixed overhead incurred.

Electrical Motor

A device that converts electrical energy into mechanical energy, widely used in various applications including appliances, industrial machinery, and vehicles.

Standard Machine-Hours

A predetermined measure of how long machines are expected to operate to complete a production task.