The Random Walk Theory Says That

question 241

Multiple Choice

The random walk theory says that

• A) stock prices follow a trend for varying periods of time.
• B) successive stock prices increase more than they decrease.
• C) successive stock prices are dependent on the weighted average of the previous week's prices.
• D) successive stock prices are independent of each other.

---

Definitions:

Remaining Capital Balances

The portion of a company's capital that remains after accounting for expenses, withdrawals, and any losses.

Income Ratios

Financial metrics that assess a company's ability to generate profit relative to its revenue, operating costs, or other financial metrics over a specific period.

Liquidation Process

The procedure through which a company's assets are sold off to pay creditors and close the business, often occurring during bankruptcy proceedings.

Capital Deficiencies

Situations where a business lacks the necessary funds or assets to support its operations and growth.