Noise Traders

question 7

Multiple Choice

Noise traders

• A)pursue trading strategies based on inflated view of their ability to understand the significance of a piece of news.
• B)make use of inside information.
• C)reduce the amount of risk in the market.
• D)help to ensure that asset prices reflect the fundamental values of the securities being traded.

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Definitions:

Opportunity

A set of circumstances that makes it possible to do something, especially something that might lead to success or advancement.

Business Plan

A document that outlines a company's strategic direction, goals, and the methods it will use to achieve those goals.

Windows of Opportunity

Specific periods during which the conditions are right to pursue a particular action or make a change to gain a strategic advantage.

Product Life Cycle

The progression of a product through stages of introduction, growth, maturity, and decline in the market.