The random walk hypothesisA) implies that security analysis is unable to predict future market behavior. B) suggests that random patterns appear but only over long periods of time. C) has been disproved based on recent computer simulations. D) accounts for market anomalies such as calendar effects.

Question

Sage Johns

Business

3 August, 01:50

The random walk hypothesisA) implies that security analysis is unable to predict future market behavior. B) suggests that random patterns appear but only over long periods of time. C) has been disproved based on recent computer simulations. D) accounts for market anomalies such as calendar effects.

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Answers (1)

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Gideon Salazar · Answer 1

A) implies that security analysis is unable to predict future market behavior.

Explanation:

The random walk hypothesis -

It is a financial theory, which states that the prices in the stock market change randomly, i. e., change in an uneven manner, and thereby can be predicted.

The concept was given by Jules Regnault, and then by the Louis Bachelier.

Hence, from the options given in the question, the correct statement for the random walk hypothesis, is options (A).