A Prediction Market Is A

question 18

Multiple Choice

A prediction market is a:

• A) perfectly functioning futures market, so that futures output can be interpreted as probabilities and used to make predictions.
• B) perfectly functioning futures market, so that futures prices can be interpreted as probabilities and used to make predictions.
• C) speculative market carefully designed so that output can be interpreted as probabilities and used to make predictions.
• D) speculative market carefully designed so that prices can be interpreted as probabilities and used to make predictions.

---

Definitions:

Required Return

The minimum annual return rate that incites people or companies to allocate resources to a particular investment or project.

Constant Growth

A model in finance that assumes a stock’s dividends will continue to grow at a uniform rate indefinitely, used to estimate the stock's current value.

Dividends

Proceeds allocated by a corporation to its share owners, principally derived from the business's earnings.

Rate Of Return

The fiscal growth or shrinkage in an investment's value during a particular lapse of time, marked as a percentage of the initial investment expense.