James Tobin Reasoned That

question 31

Multiple Choice

James Tobin reasoned that:

• A) the stock market is a "random walk."
• B) if the stock market values capital at less than its replacement cost, the stock market will go up.
• C) if the stock market values capital at less than its replacement cost, the stock market will go down.
• D) if the stock market values capital at less than its replacement cost, the firm's managers will not replace capital as it wears out.

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