An Important Assumption Underlying the Use of Technical Analysis Techniques

question 82

Multiple Choice

An important assumption underlying the use of technical analysis techniques is that ________.

• A) security prices adjust rapidly to new information
• B) security prices adjust gradually to new information
• C) security dealers will provide enough liquidity to keep price changes relatively small
• D) all investors have immediate and costless access to information

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Definitions:

Forward Market

A platform for trading financial agreements that are negotiated presently but fulfilled in the future.

Collection Float

The time gap between when a check is deposited and when funds are made available in the account, affecting the company's cash flow.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a basket of goods approach to find the relative values of the currencies.

Exchange Rates

The value of one currency expressed in terms of another currency, affecting international trade and investments.