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If a Stock Price Follows a Markov Process Which of the Following

Question 14

Multiple Choice

If a stock price follows a Markov process which of the following could be true


A) Whenever the stock price has gone up for four successive days it has a 70% chance of going up on the fifth day.
B) Whenever the stock price has gone up for four successive days there is almost certain to be a correction on the fifth day.
C) The way the stock price moves on a day is unaffected by how it moved on the previous four days.
D) Bad years for stock price returns are usually followed by good years.

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