The random walk theory of stock prices indicates that Question 18 options: managed mutual funds will persistently earn a higher rate of return than indexed funds if they are willing to do a little research, even beginning investors will be able to pick the stocks that increase the most in price in the future stock market investors can expect to earn a steady real rate of return of about 7 percent annually current stock prices already reflect information about factors influencing future stock prices that can be forecast with any degree of certainty