The "Filter Rule" Is a Technical Analysis Tool That Says

question 12

Multiple Choice

The "filter rule" is a technical analysis tool that says, "Wait until a stock increases by a certain percentage (i.e., the filter) after it has hit a recent all-time low and then buy the stock. Wait
Until it decreases by that percentage after it has hit a recent all-time high to sell the stock."
Proponents of the rule indicate that abnormal profits can be made by following it. If this is the
Case, then

• A)markets are semistrong efficient.
• B)markets are weakly efficient.
• C)markets are strongly efficient.
• D)None of the above. Markets are not even weakly efficient if this rule works.

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