Which of the following statements is INCORRECT about the Random Walk Hypothesis? A) It assumes successive returns are statistically independent. B) It assumes there is no correlation between the returns in one period and the next. C) It assumes the distribution of returns in all periods is identical. D) It assumes historical share prices can be used to predict future price movements.
Which of the following statements is INCORRECT about the Random Walk Hypothesis? A) It assumes successive returns are statistically independent. B) It assumes there is no correlation between the returns in one period and the next. C) It assumes the distribution of returns in all periods is identical. D) It assumes historical share prices can be used to predict future price movements.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Which of the following statements is INCORRECT about the Random Walk
Hypothesis?
A) It assumes successive returns are statistically independent.
B) It assumes there is no correlation between the returns in one period and the next.
C) It assumes the distribution of returns in all periods is identical.
D) It assumes historical share prices can be used to predict future price movements.
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