Random walk
Theory that stock price changes from day to day are at random; the changes are independent of each other and have the same probability distribution. Many believers of the random walk theory believe that it is impossible to outperform the market consistently without taking additional risk. |
Similar financial terms
Random SamplingA sampling scheme whereby each observation is drawn from the population. In particular, no unit is more likely to be selected than any other unit, and each draw is independent of all other draws.
Randomized strategy
A strategy of introducing into the decision-making process a random element that is designed to reduce the information content of the decision-maker's observed choices.
Random variable
A function that assigns a real number to each and every possible outcome of a random experiment.
Normal random variable
A random variable that has a normal probability distribution.
Continuous random variable
A random value that can take any fractional value within specified ranges, as contrasted with a discrete variable.
