If Stock Prices Follow a Random Walk

question 15

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 not random.
• D) price changes are random.
• E) price movements are predictable.

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The amount or number of a material or immaterial good considered as a unit or entity.

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The standard of something as measured against other things of a similar kind; the degree of excellence of something.

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