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random walk theory
(redirected from random-walk hypothesis)

   Also found in: Financial 0.01 sec.
random walk theory
n
(Economics, Accounting & Finance / Stock Exchange) Stock Exchange the theory that the future movement of share prices does not reflect past movements and therefore will not follow a discernible pattern


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5) This estimation procedure amounts to a simple test of Hall's (1978) random-walk hypothesis, namely, if the [beta]'s are significantly different from zero, the said hypothesis is rejected.
They argue that univariate estimation of stock prices will not reject the random-walk hypothesis for short autoregressions (e.
 
 
 
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