With Respect to the Notion That Stock Prices Follow a Random

question 14

Multiple Choice

With respect to the notion that stock prices follow a random walk, several researchers have concluded that:

• A) stock prices reflect a majority of available information about the firm.
• B) successive price changes are predictable.
• C) past stock price changes provide little useful information about current stock prices.
• D)stock prices always rise excessively in January.

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Definitions:

Complementary

Pertains to goods or services that are often used together, where an increase in demand for one leads to an increase in demand for the other.

Fixed Proportions

A production scenario where inputs must be used in constant ratios, lacking flexibility in substitution or adjustment.

Input

Factors including workforce, materials, and financial assets employed in the process of producing goods and services.

Resource Demand

The desire and ability of businesses or individuals to acquire economic resources or inputs for the production of goods and services.