Part A: Short Answers. No need to explain. Simply wiite uu 1. Technic al analysi
ID: 2794695 • Letter: P
Question
Part A: Short Answers. No need to explain. Simply wiite uu 1. Technic al analysis is a controversial investment practice. Technical analysis covers a wide array of techniques, which are all used in an attempt to predict the direction of a particular stock or the market. In general, technical analysts rely heavily on stock prices. A technical analyst would argue that past price movements provide information about the future direction of a particular stock or the market as a whole Suppose an investor could earn abnormal returns from technical analyses, which of the historical following statement is correct? (i) (ii) the market is less than weak form efficient the market is weak form efficient but less than semi-strong form efficient 2. The financial markets are the most carefully documented human phenomena inExplanation / Answer
The technical analyst who looks into the past data will come to a conclusion that the market is not efficient. Technical analysts look at the price of the past, the market will not be able to make the weak form efficient. If the market is not weak form, which means it would be effective under stronger assumption about the received information that is the past data.
In this scenario in weak form efficient market the investor cannot earn abnormal returns.
It cannot be semi-strong form either if it can earn abnormal returns.
hence the answer is (i) The market is less than weak form efficient.