The random walk hypothesis
A) implies that security analysis is unable to predict future market behavior.
B) suggests that random patterns appear but only over long periods of time.
C) has been disproved based on recent computer simulations.
D) supports the notion that random price movements are indicative of inefficient markets.

Question

Quizplus · Accepted Answer

The random walk hypothesis implies that stock prices follow a random pattern and cannot be predicted by analyzing past prices, making security analysis unable to reliably predict future market behavior.

The Random Walk Hypothesis