According to random-walk theory,what are the (approximate)odds that a stock will increase in price after having increased on two consecutive days of trading?
A) 0%
B) 25%
C) 50%
D) 100%

Question

Quizplus · Accepted Answer

According to the random-walk theory, the movement of stock prices is independent of past movements, which means that the odds of a stock increasing after having increased for two consecutive days is 50%. The previous two increases do not have any effect on the likelihood of the stock increasing on the third day.

According to Random-Walk Theory,what Are the (Approximate)odds That a Stock