If You Believe That Stock Prices Follow a Random Walk,then

question 10

Multiple Choice

If you believe that stock prices follow a random walk,then probably you

• A)do not believe that there is positive relationship between risk and return.
• B)do not believe that stock prices reflect all available information.
• C)believe in the validity of the efficient markets hypothesis.
• D)believe that it is a good idea to engage in fundamental analysis.

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Definitions:

Incentive Plans

Compensation strategies designed to motivate employees by linking a portion of their pay directly to individual, team, or organizational performance.

Employee Behavior

Employee behavior encompasses the actions and conduct of individuals within a workplace, affecting productivity and workplace atmosphere.

Human Resource Department

The division within a business that is charged with overseeing employee benefits, recruitment, training, and compliance with labor laws.

Stock Options

A type of compensation provided by companies to employees in the form of equity, giving the employee the right to buy shares at a set price.