An examination of the relationship between stock prices and the economy has shown that the relationship is
A) weak and that stock prices turn after the economy does.
B) nonexistent.
C) strong and that stock prices turn after the economy does.
D) strong and that stock prices turn before the economy does.
E) weak and that stock prices turn before the economy does.

Question

Quizplus · Accepted Answer

The relationship between stock prices and the economy is generally considered strong because stock prices often act as leading indicators. This means they tend to turn before the economy does, reflecting investors' expectations about future economic activity.

An Examination of the Relationship Between Stock Prices and the Economy