Asked by Shawntay Williams on Jun 08, 2024
Verified
Random price movements indicate ________.
A) irrational markets
B) that prices cannot equal fundamental values
C) that technical analysis to uncover trends can be quite useful
D) that markets are functioning efficiently
Random Price Movements
Refers to the unpredictability in the price changes of securities in financial markets, often driven by a variety of factors without a clear pattern.
Technical Analysis
An approach to assess securities by examining statistical data produced by market behavior, including historical prices and trading volumes.
- Comprehend the implications of random price movements on market predictions and patterns.
Verified Answer
EG
Elissa GoldbergJun 11, 2024
Final Answer :
D
Explanation :
Random price movements suggest that markets are functioning efficiently, as prices reflect all available information and adjust quickly to new information, making it difficult to predict future movements based on past trends. This is a core idea of the Efficient Market Hypothesis.
Learning Objectives
- Comprehend the implications of random price movements on market predictions and patterns.
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