To say that stock prices follow a "random walk" is to argue that stock prices
A)rise,then fall,then rise again.
B)rise,then fall in a predictable fashion.
C)tend to follow trends.
D)cannot be predicted based on past trends.

Question

Quizplus · Accepted Answer

The concept of a "random walk" in the context of stock prices suggests that they cannot be predicted based on past trends. The movements of stock prices are believed to be somewhat unpredictable and random, making it difficult to reliably forecast future price changes.

To Say That Stock Prices Follow a "Random Walk" Is