What is the random walk theory?
What will be an ideal response?
The random walk theory is the theory that prices of stocks move independently in securities markets and, hence, that there are no predictable trends that can be used to make riskless profits. The theory assumes that information about companies and stocks quickly are processed by the market and reflected in changed prices. This process happens so fast that no one can generate riskless profits.
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Consider an economy where the only goods traded are coconuts and pineapples. Last year, 100 coconuts were sold at €1 apiece, and 200 pineapples were sold at €2.50 apiece. If the money supply was €100, what was velocity?
A. 30 B. 15 C. 6 D. 5
The perpetual state of insufficiency of resources to satisfy people's unlimited wants is:
a. apparent only in poor countries. b. completely unrealistic. c. present in modern economies, but not in the past. d. the definition of scarcity.