Urrutia (1995), argued for the rejection of the

random walk hypothesis when using the variance ratio test to study market efficiency in four major Latin American stock markets (Argentina, Brazil, Chile, and Mexico).

Weak-form hypothesis of commodity market can be tested through a

random walk hypothesis.

Random Walk Hypothesis (RWH) states that it is not possible to predict future prices based on the past price movements and it is highly unlikely for anyone to earn profits consistently over time.

Durbin-Watson test (Durbin and Watson, 1951), the augmented Dickey-Fuller test (Dickey and Fuller, 1979) and different variants of these are the most commonly used tests for the

random walk hypothesis in recent years (Worthington and Higgs, 2003; Kleiman, Payne and Sahu, 2002; Chan, Gup and Pan, 1997).

They found that significant positive serial correlation for weekly and monthly holding-period returns and therefore, the study revealed that the rejection of

random walk hypothesis for the sample period.

0]: [alpha] = [gamma] = [beta] = 0, this is the confirmation of the

random walk hypothesis.

9) This implies that lower than average changes in per-capita real GNP are associated with lower future taxes than otherwise, suggesting a cyclical aspect to tax rates that is absent from the simple

random walk hypothesis.

The study of distributional implications of the

random walk hypothesis can be traced back to Bachelier's (1900) seminal development of arithmetic (or absolute) Brownian motion as well as his pioneering work in the application of this stochastic process to financial data.

They found that the

random walk hypothesis is inappropriate to explain the price changes.

Markov theory is seen to be relevant to the analysis of stock prices in two ways: As a useful tool for making probabilistic statements about future stock price levels and secondly as an extension of the

random walk hypothesis.

As mentioned previously there are several statistical methods used to test the

random walk hypothesis.

Under the restricted version of the model the

random walk hypothesis is rejected for Pakistan.