The Statement That Stock Prices Follow a Random Walk Implies

question 45

Multiple Choice

The statement that stock prices follow a random walk implies that
I.the correlation coefficient between successive price changes (auto correlation) is not significantly different from zero;
II.successive price changes are positively related;
III.successive price changes are negatively related;
IV.the autocorrelation coefficient is positive

• A)I only
• B)II only
• C)II and III only
• D)IV only

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