If Stock Prices Follow a Random Walk, Which of the Following

question 55

Multiple Choice

If stock prices follow a random walk, which of the following statement(s) is(are) correct?

• A)Successive stock price changes are not related
• B)The history of stock prices cannot be used to predict future returns to investors
• C)Both A and B
• D)Neither A nor B

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Definitions:

Cyclohexanone

An organic compound characterized by a six-membered cyclic structure containing one ketone group, used as a solvent and in the synthesis of various chemicals.

Cation

A positively charged ion that is created when an atom loses one or more electrons, resulting in more protons than electrons.

Propensity

A natural inclination or tendency to behave in a particular way.

Hydrate

A compound that contains water molecules bound to another compound or within its crystal structure.