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Which financial market theory proposes that security prices move unpredictably as random walks, making technical pattern forecasting impossible?

ADow Theory
BGordon Model
CElliot Wave Theory
DRandom Walk Theory

Explanation

* Random Walk Theory states asset price changes are independent and identically distributed, making historical price patterns useless for future prediction.
* Closely linked with Weak-Form Efficient Market Hypothesis (EMH).

Exam Relevance
  • Topic: Financial Markets
  • Subtopic: Market Hypothesis
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

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