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Discuss whether the following statements are true or false with supporting explanations, if stock prices follow a random walk pattern: Successive stock prices are not
Discuss whether the following statements are true or false with supporting explanations, if stock prices follow a random walk pattern:
- Successive stock prices are not related. (5 marks)
- Successive stock price changes are not related. (5 marks)
- Stock prices fluctuate above and below a normal long run price. (5 marks)
- The history of stock prices cannot be used to predict future returns for investors. (5 marks)
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