If price changes reflect new information why should returns, Ask an Expert

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If price changes reflect new information, why should returns fluctuate randomly?
Consider the following stock price sequence:

t	P_t
1	50
2	51
3	52
4	58
5	56

Compute three-day moving averages for days 3, 4, and 5. If one assumes that the three-day moving average price represents the true value of the stock because of the elimination of noise, should the investor buy or sell shares on days 3, 4, and 5?

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Corporate Finance, Finance

Category:- Corporate Finance
Reference No.:- M91409936

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