When Maurice Kendall examined the patterns of stock returns in 1953, he concluded that the stock market was __________.Now, these random price movements are believed to be _________.
A)inefficient; the effect of a well-functioning market
B)efficient; the effect of an inefficient market
C)inefficient; the effect of an inefficient market
D)efficient; the effect of a well-functioning market

Question

Quizplus · Accepted Answer

Maurice Kendall's examination led him to conclude that stock market movements were seemingly random, suggesting inefficiency in how information was reflected in stock prices. However, the modern interpretation of these random movements is that they are a sign of a well-functioning market, where prices adjust quickly to new information, making it hard to predict future movements based on past trends.

When Maurice Kendall Examined the Patterns of Stock Returns in 1953