Which of the following is true? A) A random walk for stock price changes is inco

Question

Which of the following is true?

A) A random walk for stock price changes is inconsistent with observed patterns in price changes.

B) If the stock market follows a random walk, price changes should be highly correlated.

C) If the stock market is weak form efficient, then stock prices follow a random walk.

D) All of these.

E) Both If the stock market follows a random walk, price changes should be highly correlated; and If the stock market is weak form efficient, then stock prices follow a random walk.

Explanation / Answer

A) A random walk for stock price changes is inconsistent with observed patterns in price changes.

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