Question

The statement that stock prices do NOT follow a random walk implies that (I) successive price changes are independent of each other; (II) successive price changes are positively related; (III) successive price changes are negatively related; (IV) the autocorrelation coefficient is zero

(I) and (IV) only

(II) or (III)

(III) only

(II) only

(I) only

Answer 1

In a random walk returns in future has no relation or any correlation with past returns.
For random walk successive prices are positively or negatively correlated.

Option b Only (II) or (III) is correct option.