If Share Prices Appear to Follow a Random Walk

question 23

Multiple Choice

If share prices appear to follow a random walk:

• A) selecting shares for portfolios is irrelevant.
• B) investment analysts are unimportant.
• C) successive share price changes are unpredictable.
• D) it is impossible to know when to buy shares.

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Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and stockholders' equity at a specific point in time.

Income Statement

A financial statement that summarizes revenues, expenses, and profits or losses of a company over a specific period, showing how revenue is transformed into net income.

Statement Of Owners' Equity

A financial document detailing the changes in owner's equity over a specific period through contributions, withdrawals, and earnings.

Balance Sheet

A financial statement that shows the assets, liabilities, and owner's equity of a company at a specific point in time.