Figure 163: Daily Returns to Jim-Bob's Spark Plugs, LLC

question 36

Multiple Choice

Figure 16.3: Daily Returns to Jim-Bob's Spark Plugs, LLC
-Figure 16.3 shows the daily stock returns to Jim-Bob's Sparkplugs, LLC. From this figure you conclude that ________ because ________.

• A) this market is efficient; the data seems to follow a random walk
• B) Jim-Bob does not know how to operate his business; returns can be negative
• C) Jim-Bob can beat the market; average returns are greater than zero
• D) stock prices are predictable; fluctuations are consistent
• E) there is some insider trading occurring; mean returns are zero

---

Definitions:

Unsold Goods

Items that have been produced or acquired for sale but have not been purchased by consumers, often leading to excess inventory for businesses.

Republicanism

A political ideology centered on citizenship in a state organized as a republic, emphasizing liberty, and the rule of law as opposed to hereditary monarchy.

Virtue

is a trait or quality deemed to be morally good and thus is valued as a foundation of good moral being. Personal virtues include traits such as integrity, courage, fortitude, honesty, and loyalty.

Political Process

The methods and actions taken to formulate and implement public policies or to elect individuals to government positions, involving participation by citizens, politicians, and institutions.