Abstract
The variance-ratio tests are used to test the random walk hypothesis for Pakistan’s stock exchange. The evidence indicates that the stock prices generally do not follow random walk over the entire examined period. This piece of evidence is robust during the second sub-period. During the first sub-period, however, the stock prices do not behave non-randomly. The absence of a random walk is implying that profitable trading rules can be devised. The findings also show that the Karachi Stock Exchange falls back to normal after being dramatically affected by a shock.
Keywords
Karachi Stock Exchange, Stock Indices
DOI
https://doi.org/10.54784/1990-6587.1096
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Recommended Citation
Rashid, A. (2006). Random walk tests for KSE-100 index: Evidence and implications. Business Review, 1(1), 80-95. Retrieved from https://doi.org/10.54784/1990-6587.1096
