Random Walk in Economics: Definition & Theory


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question 1 of 3

According to the random walk theory, stocks are what?

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1. Who benefits from the random walk theory?

2. Seasonal trends are what to the random walk theory?

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About This Quiz & Worksheet

Use the worksheet and quiz to learn about the economic concept of 'random walk.' You will be quizzed on things like the characteristics of stocks and who benefits from random walk theory.

Quiz & Worksheet Goals

Study tools like these will help you to:

  • Comprehend seasonal trends
  • Identify when a financial advisor is necessary to pick stocks, per random walk theory
  • Understand when past activity is used to predict future activity

Skills Practiced

  • Making connections - use understanding of the concept of random walk theory to understand the volatility of the stock market
  • Interpreting information - verify that you can read information regarding the need for financial advisors and interpret it correctly
  • Information recall - access the knowledge you've gained regarding seasonal trends

Additional Learning

For more about random walk theory, read this lesson named Random Walk in Economics: Definition & Theory. The lesson covers the following study points:

  • Define random walk theory
  • Be able to interpret plausible exceptions to the theory
  • Explain why random walk theory is important