If a Stock Price Follows a Markov Process Which of the Following

question 3

Multiple Choice

If a stock price follows a Markov process which of the following could be true

• A) Whenever the stock price has gone up for four successive days it has a 70% chance of going up on the fifth day.
• B) Whenever the stock price has gone up for four successive days there is almost certain to be a correction on the fifth day.
• C) The way the stock price moves on a day is unaffected by how it moved on the previous four days.
• D) Bad years for stock price returns are usually followed by good years.

---

Definitions:

Deficiencies

The lack or shortage of necessary qualities, capacities, or elements.

Fiedler's Theory

A leadership model proposing that a leader's effectiveness is contingent on both their leadership style and the favorableness of the leadership situation.

Task-Motivated Leaders

Leaders who are primarily focused on achieving specific goals and completing tasks efficiently.

High Control

A management style or situation characterized by strict rules and a high degree of oversight and direction.