To Say That Stock Prices Follow a "Random Walk" Is

question 34

Multiple Choice

To say that stock prices follow a "random walk" is to argue that

• A) stock prices rise, then fall, then rise again.
• B) stock prices rise, then fall in a predictable fashion.
• C) stock prices tend to follow trends.
• D) stock prices cannot be predicted based on past trends.

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Definitions:

Demographic Data

Collected statistical data about the characteristics of a population, such as age, sex, income level, and education, for analysis and policy-making.

U.S. Census Bureau

A principal agency of the U.S. Federal Statistical System responsible for producing data about the American people and economy.

Malthusian Theorem

The theory that exponential growth in population will outpace arithmetic growth in food production and other resources.

Demographic Transition

A theory about change over time from high birth and death rates to low birth and death rates, resulting in a stabilized population.