Reading 12: Technical Analysis-LOS h 习题精选 technical, allocation, 2011, face, relative

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Session 3: Quantitative Methods: Application
Reading 12: Technical Analysis

LOS h: Describe intermarket analysis as it relates to technical analysis and asset allocation.

 

 

When technical analysts say a stock has good "relative strength," they mean the:

A) recent trading volume in the stock has exceeded the normal trading volume.

B) stock has performed well compared to other stocks in the same risk category as measured by beta.

C) ratio of the price of the stock to a market index has trended upward.

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This is the definition of relative strength. When the ratio of the stock price to the market price increases over time, the stock is out-performing the market.

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The most appropriate tool to use for intermarket analysis of two different asset classes is a:

A) relative strength chart.

B) stochastic oscillator.

C) moving average convergence/divergence chart.

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Relative strength charts are useful for intermarket analysis because they illustrate the performance of one asset, sector, or index relative to another. Momentum indicators, such as stochastic oscillators and MACD oscillators, are generally used to analyze individual markets.