random-walk hypothesis

random-walk hypothesis definition - business

random-walk hypothesis

The hypothesis that states that past stock prices are of no value in forecasting future prices, because past, current, and future prices merely reflect market responses to information that comes into the market at random. In short, price movements are no more predictable than the pattern of the walk of a drunk.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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