The Statement That Stock Prices Follow a Random Walk Implies

question 29

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 +1.0 or −1.0

• A)I only
• B)II and III only
• C)IV only
• D)III only

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