In the random walk hypothesis, rates of return must meet which of the following conditions?
A)Independent over time.
B)Identically distributed.
C)Uncorrelated.
D)Independently and identically distributed.

Question

Quizplus · Accepted Answer

Key Takeaway: The Random Walk hypothesis is a model in which asset prices are unpredictable. This model requires the rates of returns to be independently and identically distributed (iid) for statistical reference.

In the Random Walk Hypothesis, Rates of Return Must Meet