If the Stock Price Follows a Random Walk,successive Price Changes

question 64

Multiple Choice

If the stock price follows a random walk,successive price changes are statistically independent.If σ² is the variance of the daily price change,and there are t days until expiration,the variance of the cumulative price change is:

• A)σ²
• B)(σ²)× (t)
• C)(σ²)/t
• D)(σ)× (t²)

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