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.

---

Definitions:

Significant Digits

The number of digits in a number that contribute to its accuracy, usually starting from the first non-zero digit.

Double Variable

A type of variable in programming that can hold a double-precision 64-bit IEEE 754 floating point.

Equivalent

Describes entities that are equal in value, function, or meaning even if they are not the same object or instance.

Variable

A symbolic name associated with a value and whose associated value may be changed during the course of program execution.