- CFA Exams
- CFA Level I Exam
- Study Session 19. Portfolio Management (2)
- Reading 56. Technical Analysis
- Subject 1. Definition and Scope
CFA Practice Question
Which of the following are underlying assumptions of technical analysis?
II. Security prices adjust rapidly to stock market information.
III. Security prices move in trends, which persist for appreciable lengths of time.
IV. The market value of any good or service is determined solely by the interaction of supply and demand for the good or service.
I. Past performance has no influence on future performance or market values.
II. Security prices adjust rapidly to stock market information.
III. Security prices move in trends, which persist for appreciable lengths of time.
IV. The market value of any good or service is determined solely by the interaction of supply and demand for the good or service.
A. I and IV only
B. II and III only
C. III and IV only
User Contributed Comments 4
| User | Comment |
|---|---|
| andy4cfa | II is wrong because the new information enters the market over a period of time, leading to a gradual adjustment of stock prices but not a rapid change |
| julamo | If II was right, market would be efficient and technical analysis wouldn't exist |
| StanleyMo | assumption andy! |
| Shaan23 | I swear in the notes it said that TA adjust instantaneously..... |