The Difference Between a Random Walk and a Submartingale Is

question 17

Multiple Choice

The difference between a random walk and a submartingale is the expected price change in a random walk is ______, and the expected price change for a submartingale is ______.

• A) positive; zero
• B) positive; positive
• C) positive; negative
• D) zero; positive
• E) zero; zero

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Definitions:

Reduces Liquidity

Refers to any action or situation that decreases the ease with which assets can be converted into cash without significant loss in value.

Divestiture

Sale of assets by a company.

Merger

A corporate strategy of combining two or more companies into a single company in order to enhance competitive advantages or expand market share.

Tender Offer

Offer made by a company to the target company’s shareholders specifying a price and the form of payment.