The portfolio is likely to do better than the market if stock prices increase, and worse than the market if stock prices decrease.
true or false explain
If stock prices follow a random walk, future stock prices are easy to predict. (true or false) explain
|The statement is true given that you are invested in a long only|
|portfolio. There are hedge fund investors who profit when the stock prices fall|
|because they are able to short sell the stock.|
|The statement in the question is true.|
|The random walk theory in finance states|
|that stock price changes are random and cannot be|
|predicted. In addition, stock prices follow the efficient market hypothesis|
|that states that stock prices reflect all available information and the price of|
|stock in the market is the intrinsic value of the stock.|
|The statement in the question is false.|
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