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Basic Question 4 of 8

A time-series is considered a random walk if:

A. It exhibits a clear trend over time.
B. Future values are completely predictable.
C. Changes from one period to the next are random and unpredictable.
D. It follows a linear regression model.

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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

Learning Outcome Statements

explain the instability of coefficients of time-series models;

describe characteristics of random walk processes and contrast them to covariance stationary processes;

CFA® 2025 Level II Curriculum, Volume 1, Module 5.