If the random walk theory is correct, prudent investors could choose their stock portfolio by

Question

Quizplus · Accepted Answer

The random walk theory suggests that stock prices move in a random manner and are not influenced by past events, making it impossible to predict future movements based on historical data. Therefore, if this theory is correct, the method of selecting stocks (such as throwing darts at a financial page) would not impact the expected return, as all information is already reflected in current prices and future movements are unpredictable.

If the Random Walk Theory Is Correct, Prudent Investors Could