Based on the random walk theory,if a stock's price decreased last week,then this week the price:
A) will reverse last week's loss and go up.
B) will continue last week's decline.
C) will stand still until new information is released.
D) has an equal chance of going either up or down.

Question

Quizplus · Accepted Answer

According to the random walk theory, the past movement of a stock's price cannot be used to predict its future movement. Therefore, the stock has an equal chance of going either up or down this week, independent of whether it decreased or increased last week.

Based on the Random Walk Theory,if a Stock's Price Decreased