In a random walk model,the series itself
A)is random.
B)is not random but its differences are random.
C)and its differences are random.
D)and its differences are not random.

Question

Quizplus · Accepted Answer

In a random walk model, the series appears to follow a path where the differences (or changes) from one period to the next are random, but the series itself, being the cumulative sum of these random differences, does not behave randomly. This means that while the series may look unpredictable when observed at any single point, its structure—being a cumulative sum of random differences—follows a specific stochastic pattern.

In a Random Walk Model,the Series Itself