Reading 12: Technical Analysis - LOS a ～ Q6-10

答案和详解如下：

6.A technical analyst believes stock prices are primarily driven by:

A)   the random walk hypothesis.

B)   block traders.

C)   specialist trading.

D)   market supply and demand forces.

The correct answer was D)

Other assumptions of technical analysis include:       Supply and demand is driven by both rational and irrational behavior, security prices move in trends that persist for long periods of time, and while the cause for changes in supply and demand are difficult to determine, the actual shifts in supply and demand can be observed in market price behavior.

7.Which of the following is NOT a basic assumption of technical analysis?

A)   Market prices are set by supply and demand forces.

B)   Security price trends persist for long periods of time.

C)   Supply and demand is driven by both rational and irrational behavior.

D)   Liquidity is provided by securities dealers.

The correct answer was D)

The fourth assumption of technical analysis is that while the cause for changes in supply and demand are difficult to determine the actual shifts in supply and demand can be observed in market price behavior.

8.A basic assumption of technical analysis in contrast to fundamental analysis is that:

A)   security prices move in patterns, which repeat over long periods.

B)   aggregate supply of and demand for goods and services are key determinants of stock value.

C)   a stock's market price will approach its intrinsic value over time.

D)   financial statements provide information crucial in valuing a stock.

The correct answer was A)

The difference between fundamental analysts, technical analysts, and efficient market analysts is the speed at which these analysts believe news is impounded into prices.  Technicians believe the reaction is slow, fundamentalists feel prices adjust quickly, and efficient market hypothesis analysts feel it happens almost instantaneous.

9.Which of the following statements about technicians is FALSE? Technicians believe:

A)   market value is determined by supply and demand.

B)   price adjustments occur rapidly in response to new information.

C)   security prices tend to move in trends.

D)   their job is to detect the beginnings of trends, not to predict them.

The correct answer was B)

Technical analysts believe that the market reacts slowly to new information, so that prices reflect news gradually.

10.Which of the following statements regarding the speed at which analysts believe stock prices reflect new information is most likely accurate?

A)   Technicians believe that prices adjust quickly to new information.

B)   Both technicians and followers of the efficient market hypothesis believe prices adjust slowly to new information.

C)   Followers of the efficient market hypothesis believe prices adjust quickly to new information.

D)   Both technicians and followers of the efficient market hypothesis believe prices adjust quickly to new information.

The correct answer was C)

Technicians believe that the reaction is slow. Followers of the efficient market hypothesis believe that the reaction is quick.