The______ Theory States That the Stock Market Goes Through Periods

question 26

Multiple Choice

The______ theory states that the stock market goes through periods in which stock prices rise higher than theirFundamental value and other periods where stock prices fall below their fundamental value.

• A)rational expectations
• B)adaptive expectations
• C)irrational expectations
• D)realized expectations

---

Definitions:

Unrealized Loss

A loss that results from holding onto an investment that has decreased in price, but has not yet been sold.

Investment Revenue

Income earned from various investments, including dividends, interest, and profit from the sale of investment assets.

Dividend Revenue

Income received from owning shares of stock in a company when it distributes a portion of its earnings to shareholders.

Fair Value

The estimated price at which an asset could be bought or sold in a current transaction between willing parties, other than in a liquidation sale.