Question: What is the random walk hypothesis and how does it
What is the random walk hypothesis, and how does it apply to stocks? What is an efficient market? How can a market be efficient if its prices behave in a random fashion?
Answer to relevant QuestionsBriefly describe each of the following and note how it is computed and how it is used by technicians: a. Advance-decline lines b. Arms index c. On-balance volume d. Relative strength index e. Moving averages Briefly explain how behavioral finance can affect each of the following: a. The trading activity of investors b. The tendency of value stocks to outperform growth stocks c. The tendency of stock prices to drift up (down) ...Briefly define each of the following terms and describe how it can affect investors’ decisions. a. Loss aversion b. Representativeness c. Narrow framing d. Overconfidence e. Biased self-attribution Compute the level of on-balance volume (OBV) for the following 3-day period for a stock, if the beginning level of OBV is 50,000 and the stock closed yesterday at $25. Does the movement in OBV appear to confirm the rising ...What are the special tax features of (a) Treasury securities, (b) Agency issues, and (c) Municipal bonds?
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