Reading 12: Technical Analysis LOS a习题精选 2010, following, technical, likely

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

LOS a: Explain the underlying assumptions of technical analysis.

Which of the following is least likely an underlying assumption of technical analysis?

A) Value and prices are determined solely by supply and demand.

B) Markets are weak-form efficient.

C) Security prices and market levels move in trends that persist for long time periods.>

Technical analysis assumes that markets are not weak-form efficient. The other three choices are assumptions of technical analysis, along with the fourth assumption that supply and demand is driven by both rational and irrational factors.

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Which of the following is a characteristic of technical analysis? A technical analyst:

A) looks for changes in the stock's value based on company research.

B) believes that the market responds more quickly to new information than do fundamental analysts.

C) looks for evidence of changes in supply and demand through market signals.

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Technicians believe that the market will respond less quickly to new information. They do not use research or financial data to estimate value. A technical analyst will look at past price movements as a guide to future price trends.

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Which of the following is least likely an underlying assumption of technical analysis?

A) Markets are efficient and all known information is reflected in prices.

B) Prices are determined by supply and demand

C) Supply and demand for a stock is driven by rational and irrational behavior.

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For technical analysis to succeed, markets must have some inefficiency in order for trends to develop.

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Analysts who look for patterns and trends in security prices for buy and sell signals are called:

A) efficient market analysts.

B) fundamental analysts.

C) technical analysts.

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Technical analysts look for patterns and trends in securities prices to determine when to buy or sell. The approach taken by technicians varies greatly from that of fundamentalists, who try to forecast value changes by analyzing expected risk and return data. Efficient market analysts feel all available information is immediately impounded in the current security price. Thus, any new information will cause instantaneous price adjustments.

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Rank fundamental analysts, technical analysts, and efficient market analysts in terms of how quickly they believe stock prices adjust to new information, from fastest to slowest.

A) Technical analysts, fundamental analysts, efficient market analysts.

B) Efficient market analysts, technical analysts, fundamental analysts.

C) Efficient market analysts, fundamental analysts, technical analysts.

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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 instantaneously.

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According to a technician, stock prices tend to move:

A) in trends that persist.

B) in an advance-decline series.

C) randomly.

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Other assumptions of technical analysis include: values, and thus prices, are determined by supply and demand, supply and demand is driven by both rational and irrational behavior, 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.

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

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

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

C) Liquidity is provided by securities dealers.

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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.

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A technical analyst believes stock prices are primarily driven by:

A) market supply and demand forces.

B) specialist trading.

C) the random walk hypothesis.

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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.

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

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

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

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

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