With respect to the notion that stock prices follow a random walk, several researchers have concluded that:
A) stock prices reflect a majority of available information about the firm.
B) successive price changes are predictable.
C) past stock price changes provide little useful information about current stock prices.
D)stock prices always rise excessively in January.

Question

Quizplus · Accepted Answer

The statement that stock prices follow a random walk implies that past price changes provide little useful information about current stock prices. Option A is true, but it does not relate to the given statement. Option B is false. Option D is false; there is no guarantee that stock prices always rise excessively in January.

With Respect to the Notion That Stock Prices Follow a Random