An investment broker at your brokerage house tells you that he has found a mutual fund that has beaten the S&P market index in 16 of the past 25 weeks. Has he really found a winner or could this be due to chance? What is the probability that this result is due to chance? (By "due to chance," we mean that there is a 50-50 chance each week that the mutual fund is higher than the S&P market index.) What's your opinion - winner or just luck?
Stock market is a random walk. This means that the best estimate of tomorrows price is going to ...
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