If Stock Prices Follow a Random Walk,then Stock Investors Can

question 19

Multiple Choice

If stock prices follow a random walk,then stock investors can make large profits by

• A)buying stocks whose prices have been falling for several days.
• B)buying stocks whose prices have been rising for several days.
• C)performing fundamental analysis of stocks using data contained in annual reports.
• D)using inside information.

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Definitions:

Corporate Profits Taxes

Taxes levied on the earnings after expenses and deductions of corporations, similar to corporate income tax but emphasizing the taxation on net profits.

Ronald McDonald's House

Programs providing a home away from home for families so they can stay close by their hospitalized child at little to no cost.

GDP

The Gross Domestic Product measures the aggregate value of all final goods and services produced within a country over a defined time span.

National Income

The total value of all goods and services produced by a country's economy over a specific period, after accounting for depreciation.