CFA Practice Question

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CFA Practice Question

Technical analysts and fundamental analysts ______.

A. agree on the basic assumptions underlying changes in stock prices
B. differ in their beliefs about how information impacts stock prices
C. both believe in the efficient markets hypothesis
Correct Answer: B

Fundamental analysts believe that stock prices immediately reflect new information, leading to random fluctuation in stock prices. Technical analysts believe that stock prices adjust gradually, leading to predictable trends in security prices.

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