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.

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Definitions:

Correlate

To have a mutual relationship or connection, where one variable affects or is linked to another.

Neuroticism

A personality trait associated with a higher propensity for experiencing negative emotions such as anxiety, anger, and depression.

Impulsiveness

The tendency to act on a whim, displaying behavior characterized by little or no forethought, reflection, or consideration of the consequences.

Big Five

A model describing human personality traits in five broad dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism.