One Implication of the Random Walk Hypothesis Is

question 63

Multiple Choice

One implication of the random walk hypothesis is

• A)given the efficiency of foreign exchange markets, it is difficult to outperform the market-based forecasts unless the forecaster has access to private information that is not yet reflected in the current exchange rate.
• B)given the efficiency of foreign exchange markets, it is difficult to outperform the market-based forecasts unless the forecaster has access to private information that is already reflected in the current exchange rate.
• C)given the relative inefficiency of foreign exchange markets, it is difficult to outperform the technical forecasts unless the forecaster has access to private information that is not yet reflected in the current futures exchange rate.
• D)none of the above

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Definitions:

Fiscal Year-End

The completion of a one-year, or 12-month, accounting period, after which a company will prepare financial statements.

Employee Benefits

Non-wage compensation provided to employees in addition to their normal wages or salaries, including health insurance, pensions, and vacation.

Unemployment Taxes

Taxes imposed on employers at both federal and state levels to fund unemployment insurance benefits for workers who have lost their jobs.

Working Capital

The difference between a company's current assets and current liabilities, indicating the funds available for day-to-day operations.