CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

A "random walk" occurs when ______

A. stock price changes are random but predictable.
B. stock prices respond slowly to both new and old information.
C. future price changes are uncorrelated with past price changes.
D. past information is useful in predicting future prices.
Correct Answer: C

User Contributed Comments 4

User Comment
kalps Random walk - future stock prices are uncorrelated to past prices
ljamieson Markov process, like Brownian motion
SKIA Random walk down wall st. - Malkiel
Shaan23 No SKIA. That is correlated. You writing the CFA exam and walking down wall street.
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