Consider the Following Five Statements

question 39

Multiple Choice

Consider the following five statements:
i.Technical analysts rely on very sophisticated technical models of the macroeconomic environment.
ii.Since all chartists are confronted with identical share price data,they should identify very similar patterns and generate identical buy and sell signals from the data.
iii.A chartist will draw resistance levels at higher share price levels where an increase in supply halts price increases.
iv.Chartists will draw support lines at lower price levels where an increase in demand halts a price fall.
v.The random walk hypothesis,as applied to share price movements,implies that the examination of past price movements yields no useful information on the course of future price movements.
How many of these statements are true and how many are false?

• A) 4 statements are true and 1 is false.
• B) 3 statements are true and 2 are false.
• C) 2 statements are true and 3 are false.
• D) 1 statement is true and 4 are false.

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Definitions:

Panel

A group of people gathered to discuss, analyze, or recommend on a particular subject matter or to conduct a study.

Intersection

The point or area where two or more lines or paths cross or meet.

Long-Run Equilibrium

A state in which all adjustments to any economic changes have been made, allowing for full resource flexibility and market adjustments.

Profit-Maximizing Price

The price level at which a firm maximizes its profits, typically found where marginal cost equals marginal revenue.