CFA Practice Question

There are 221 practice questions for this study session.

CFA Practice Question

Which indicator is derived from the simplest formula?

A. A moving average
B. A stochastic oscillator
C. A relative strength index
Correct Answer: A

A simple moving average is an indicator that calculates the average price of a security over a specified number of periods. If a security is exceptionally volatile, then a moving average will help smooth the data. A moving average filters out random noise and offers a smoother perspective on the price action.

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