Some People Claim That Stocks Follow a Random Walk

question 28

Multiple Choice

Some people claim that stocks follow a random walk.What does this mean?

• A)The price of stock one day is about what it was on the previous day.
• B)Changes in stock prices cannot be predicted from available information.
• C)Stock prices are not determined by market fundamentals such as supply and demand.
• D)Prices of stocks of different firms in the same industry show no or little tendency to move together.

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Definitions:

Moral Panic

A widespread feeling of fear, often an irrational one, that some evil threatens the well-being of society, usually stirred up by media and politicians.

Publicized School Shootings

School shootings that receive widespread media attention, impacting public perception and policy discussions on gun control and school safety.

Critical Race Scholars

Academics and theorists who explore and challenge the ways in which race and racism implicitly and explicitly affect social structures, practices, and discourses.

Racial Profiling

The act of law enforcement agents singling out people for potential criminal activity suspicion based on their race, ethnicity, religious beliefs, or country of origin.