Discuss whether the following statement is true or false:
The random walk model implies that the best estimate of tomorrow's price is today's price.

Question

Quizplus · Accepted Answer

The random walk model assumes that successive returns are independent and that the returns are identically distributed over time.In other words,the random walk theory says that the historical prices cannot predict the future prices of the stock and that the prices of stock are independent of each other.

Discuss Whether the Following Statement Is True or False