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A New Look at the Random Walk Hypothesis

Published online by Cambridge University Press:  19 October 2009

Seymour Smidt
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Extract

The basic idea behind the random walk hypothesis is that in a free competitive market the price currently quoted for a particular good or service should reflect all of the information available to participants in the market that influence its present price. To the extent that future conditions of the demand or supply are currently known, their effect on the current price should be properly taken into account.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 3 , Issue 3 , September 1968 , pp. 235 - 261
Copyright
Copyright © School of Business Administration, University of Washington 1968

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