Technical Analysis Differs from Fundamental Analysis in That

question 73

Multiple Choice

Technical analysis differs from fundamental analysis in that

• A) Technical analysts contend that in-depth assessments of basic aggregate market, industry, and company performance is necessary; past price movements indicate future price movements.
• B) Technical analysts believe the market value of common stocks is determined by the interaction of supply and demand.
• C) Technical analysts argue that the market constantly weighs rational and irrational factors and that both of these affect price.
• D) Technical analysts depend far more heavily on objective, data-based approaches than the fundamentalists do.
• E) Technical analysts hold that the price of a security is determined by an expected return risk.

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Definitions:

Quantity Demanded

The amount of a good or service that consumers are willing and able to purchase at a given price.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at different prices.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance.

Surplus

An excess of production or supply over demand, often leading to a decrease in prices.