An Important Belief Underlying the Use of Technical Analysis Techniques

question 68

Multiple Choice

An important belief underlying the use of technical analysis techniques is that:

• A) security prices react rapidly to new information.
• B) security prices react gradually to new information.
• C) there are sufficient investors in the market to provide enough liquidity to keep price changes relatively small.
• D) all investors have immediate and relatively low-cost access to information.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output.

Monthly Sales Volume

The total amount of a product or service sold by a company within the span of a month.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, or insurance.

Monthly Sales Volume

The total quantity of products or services sold by a company in a month.