If the random walk theory is correct, a prudent investor might choose her stock portfolio by
a. throwing darts at the newspaper's financial page.
b. spending money to consult a stock forecaster.
c. spending time analyzing past stock performance.
d. not investing in stocks at all, since price behavior is completely erratic.
a
You might also like to view...
Initially, the creation of railroads was opposed in some countries because:
A) it was likely to increase poverty. B) it was likely to increase the cost of trade. C) it was likely to provide more power to monarchs and rulers. D) it was likely to initiate creative destruction.
Classical economists argue that
A) the government should have an active role in the economy. B) government policies will be ineffective and counterproductive. C) the government should actively intervene in the economy to eliminate business cycles. D) wages and prices don't adjust quickly, so the economy is slow to return to equilibrium.
Explicit provisions in a loan agreement that prohibit the borrower from engaging in certain activities is called:
A) credit rationing B) restrictive covenants C) credit-risk analysis D) adverse selection
If low-quality workers are unable to obtain a college degree, then a separating equilibrium can occur if
A) the cost of obtaining a degree is less than the wage premium paid to those who have obtained the degree. B) the cost of obtaining a degree is greater than the wage premium paid to those who have obtained the degree. C) the cost of obtaining a degree is zero. D) the wage premium paid to those who have obtained the degree is positive.