The Random Walk Hypothesis

question 70

Multiple Choice

The random walk hypothesis

• A) implies that security analysis is unable to predict future market behavior.
• B) suggests that random patterns appear but only over long periods of time.
• C) has been disproved based on recent computer simulations.
• D) accounts for market anomalies such as calendar effects.

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Definitions:

Positive Correlation

A relationship between two variables in which both variables move in the same direction.

Correlation Coefficient

A statistical measure that represents the degree of association or correlation between two variables, ranging from -1 to +1.

Numerical Measure

A quantitative representation of attributes or characteristics in the form of numbers or statistical values.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables on a scatterplot, ranging from -1 to +1.