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Basic Question 4 of 8
A time-series is considered a random walk if:
A. It exhibits a clear trend over time.
B. Future values are completely predictable.
C. Changes from one period to the next are random and unpredictable.
D. It follows a linear regression model.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
explain the instability of coefficients of time-series models;
describe characteristics of random walk processes and contrast them to covariance stationary processes;
CFA® 2025 Level II Curriculum, Volume 1, Module 5.