CFA Practice Question

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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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