The random walk hypothesis suggests that the best predictor of tomorrow's currency prices are today's prices.

Question

Quizplus · Accepted Answer

The random walk hypothesis states that changes in asset prices are random and unpredictable, which implies that the best predictor of tomorrow's currency prices is today's price. This hypothesis is widely accepted in finance, although it has also been subject to criticism and debate. Therefore, option A is true.

The Random Walk Hypothesis Suggests That the Best Predictor of Tomorrow's