If stock prices follow a random walk,
A. speculation in the stock market destabilizes prices.
B. a stock’s past performance is not a good indicator of its future performance.
C. rumors, news, and other “signals” have no effect on stock prices.
D. the stock market does not participate in channeling resources toward firms with high stock prices.
Answer: B
You might also like to view...
"If the official settlements balance is zero, a current account surplus implies an equal capital and financial account deficit." Is the previous statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
High-powered money consists of
A) bank reserves plus currency held by the nonbank public. B) bank reserves minus vault cash. C) all deposits at the Fed. D) deposits at the Fed plus vault cash.
The SRAS would be vertical: a. if there was no profit effect
b. if there was no misperception effect. c. if there was no profit effect or misperception effect. d. under no conceivable set of circumstances.
Fiscal policy designed to moderate the severity of a business cycle is known as
a. acceleration b. maintenance c. procyclical d. countercyclical e. discretionary