- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 5. Time-Series Analysis
- Subject 3. Random Walks
CFA Practice Question
In a random walk, any observed trends are likely to be:
A. Temporary and due to randomness.
B. Indicative of a non-random process.
C. Predictable over the long term.
D. A result of seasonality.
Correct Answer: A
The concept of a random walk implies that long-term forecasting in financial markets is not accurate at all.
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