Abstract
This article discusses the random walk hypothesis, examines some of the evidence that has been put forward to support it, and draws some implications for the theory of investment analysis. There seem to be only three references to the random walk hypothesis in U.K. actuarial literature—Weaver and Hall (1967), Hemstead (1969) and Moore (1972), all of whom discuss it very briefly. The vast majority of the research in share prices, portfolio analysis, etc. has been performed in the U.S.A., but this article will attempt to discuss this problem in the light of current U.K. research, as well as its application to maturity guarantees for equity-linked policies.
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