Social and Behavioral Sciences Commons^™

The Efficient-Market Hypothesis During A Recession, Jill Marie Williams

Undergraduate Honors Capstone Projects

The phrase, "A Random Walk Down Wall Street" may make a portfolio manager shudder. I first learned about this theory while reading a book of the same name by Burton G. Malkiel. I saw the last four years crashing down around me as I read about the competition I would be facing upon graduation–a blindfolded chimpanzee.

The random walk theorizes that the stock market is so efficient that a blindfolded chimpanzee can throw darts at the Wall Street Journal to select a portfolio of stocks that will perform equally as well as those managed by the experts. Unfortunately for the …