Security Markets Have Been Described as Random Walks and Efficient

question 26

Essay

Security markets have been described as random walks and efficient markets. What does each of these terms mean and how do they relate to the stock market? What makes a market efficient and what are the consequences of efficiency for fundamental and technical analysis?

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Definitions:

Anxious

Experiencing worry, unease, or nervousness, typically about an imminent event or something with an uncertain outcome.

Affiliation

The state or process of being closely associated or connected with an organization, group, or another individual, particularly in terms of shared goals, identity, or interests.

Accurate Information

Information that is correct, precise, and free from error.

Positive and Reassuring

Description of communication or behaviors that affirm and support others, often enhancing group morale and individual confidence.