The Statement That Stock Prices Follow a Random Walk Implies

question 27

Multiple Choice

The statement that stock prices follow a random walk implies that

• A)the correlation coefficient between successive price changes (auto correlation) is not significantly different from zero.
• B)successive price changes are positively related.
• C)successive price changes are positively related and are negatively related.
• D)the autocorrelation coefficient is positive.

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Definitions:

Supply Chain Management

The coordinating and managing of all activities involved in sourcing, procurement, conversion, and logistics management of products.

Computerized System

An electronic system that uses computers and software to manage, control, or perform a task or process.

Manual System

A system where operations, transactions or processes are carried out without the use of automated or electronic systems, typically involving physical documentation and human intervention.

Internal Controls

Processes and procedures implemented by a company to safeguard its assets, ensure financial report accuracy, and promote operational efficiency.