The Statement That Stock Prices Follow a Random Walk Implies

question 22

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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Definitions:

Personality Trait

A characteristic or quality that defines an individual's consistent behaviors and attitudes over time.

Traits

Characteristic patterns of thoughts, feelings, and behaviors that are relatively stable across time and situations, contributing to individual differences.

Personality Psychology

Personality psychology is the branch of psychology that focuses on the study of individual differences in characteristic patterns of thinking, feeling, and behaving.

Gordon Allport

A pioneering figure in psychology, known for his theory of personality that emphasized the uniqueness of the individual and the concept of personal dispositions.