Which of the Following Observations Is True of Technical Analysis,an

question 106

Multiple Choice

Which of the following observations is true of technical analysis,an approach to exchange rate forecasting?

• A)It draws on economic theory to construct models for predicting exchange rate movements.
• B)The variables contained in this model typically include relative money supply growth rates,inflation rates,and interest rates.
• C)There is a sound theoretical rationale for the assumption of predictability underlying this approach.
• D)Owing to its drawbacks,this approach has declined in importance over the last few years,giving way to fundamental analysis.
• E)It does not rely on a consideration of economic fundamentals.

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Definitions:

Subjective Benefit

The personal value or advantage gained by an individual from a product or service, which varies from person to person.

Course of Action

A plan or strategy intended to accomplish a specific goal or resolve a problem.

Opportunity Cost

The act of abandoning potential benefits available in other choices upon selecting a specific alternative.

Room and Board

Refers to the combined cost of housing and food for students at a university or boarding school.