Asset Price: Random Walk?

[sirinath]

Hi All,

Stock prices are generally held to be a random walk. But I have being
thinking how is this possible since for a very old company, any
information that was factored in about 50 years ago would hold the
same weight. My thought is that this information will have a lesser
weight as time progresses. This would imply that asset prices would
have some serial correlation. To add more to this, daily data may
appear as following a random walk since there is a lot of information
which are factored in. If the sampling frequency is increased to say
tick by tick data then returns may have some correlation.

What are your comments?

Suminda Sirinath Salpitikorala Dharmasena