Notes on the Money Market and LM Curve – Eco 3202 – Fall ...

May 17, 2002 · Data: Closing price of Coke – daily data, 1970 – 1999. The graph below depicts that data that will be used to test the efficient market hypothesis. As we know, according to the efficient market theory, the best predictor of tomorrow’s (coke) stock price is today’s (coke) price. Our regression model takes the following form: St+1 = α0 ... ................
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