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The Statement That Stock Prices Follow a Random Walk Implies

question 32

Multiple Choice

The statement that stock prices follow a random walk implies that:
I. Successive price changes are independent of each other
II. Successive price changes are positively related
III. Successive price changes are negatively related
IV. The autocorrelation coefficient is either +1 or -1


Definitions:

Konrad Witz

A Swiss painter of the 15th century known for his innovative use of landscape in religious panel paintings.

Lake Geneva

A large freshwater lake on the northern side of the Alps, shared between Switzerland and France, known for its picturesque beauty and the numerous cities and towns along its shores.

Retable

An architectural screen or wall above and behind an altar, usually containing painting, sculpture, or other decorations. See also Altarpiece.

Tilman Riemenschneider

An influential German sculptor and woodcarver of the late Gothic period, renowned for his intricate altarpieces and religious figures.

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