An important question in finance is whether the stock market is efficient. The market is efficient if

Question:

An important question in finance is whether the stock market is efficient. The market is efficient if knowledge of past changes in a stock’s price tells us nothing about future changes in the stock’s price. Here you’ll check whether daily price changes in IBM stock during 1994 are consistent with efficient markets, using the data in the file P2_90.XLS. Define an “up” day for IBM as a day when the return is greater than 0. A “down” day is when the return is less than or equal to 0. Does it appear that knowledge of whether IBM went up or down yesterday can help us predict whether it will go up or down today?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Managerial Statistics

ISBN: 9780534389314

1st Edition

Authors: S. Christian Albright, Wayne L. Winston, Christopher Zappe

Question Posted: