If You Believe That Stock Market Prices Follow a Random

question 59

Multiple Choice

If you believe that stock market prices follow a random walk,then:

• A) historical price information provides no benefit in predicting future prices.
• B) there is no financial benefit from investing in the stock market.
• C) having inside information will not lead to excess profits.
• D) studying past price movements will lead to excess profits.
• E) you also believe the market is strong-form efficient.

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Definitions:

Hearing

The sensory process by which sound waves are converted into electrical signals and interpreted by the brain, allowing the perception of sound.

Vision

The faculty or state of being able to see; also, a concept or plan regarding the future.

Middle Adulthood

A stage of life, typically considered to be from ages 40 to 65, marked by stability, maturity, and established social and economic roles.

Reproductive Ability

The capacity of an individual or organism to produce offspring.