An Investment Approach That Is Based on the Belief That

question 37

Multiple Choice

An investment approach that is based on the belief that markets overreact and will eventually self-correct is:

• A)technical analysis
• B)fundamental analysis
• C)passive investment
• D)momentum trading
• E)contrarian investment.

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Definitions:

Clean Price

The price of a bond net of accrued interest; this is the price that is typically quoted.

Coupon Bond

A type of bond that pays the holder periodic interest payments based on a predetermined rate (the "coupon rate") until it matures, at which point the principal (or face value) is repaid.

Yield To Maturity

The total expected return on a bond if held to its maturity date, including both interest payments and any gain or loss if the bond was purchased at a discount or premium.

Market Price

The current price level for transactions involving assets or services in a trade environment.