In: Finance
Which of the following is the closest reason why technical analysis is a controversial subject in academia?
C. Technical analysis is base on cash flow valuation methods. |
B. Using technical analysis, the future price is known with certainty. |
D. Technicians always base their decision on contrary indicators. |
A. According to the efficient market hypothesis, if the market is efficient, the study of past price movements cannot be used to forecast future price movements in stocks. When you buy an individual bond, you derive income from different sources. They are:
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Which of the following is the closest reason why technical
analysis is a controversial subject in academia?
A. According to the efficient market hypothesis, if the market is
efficient, the study of past price movements cannot be used to
forecast future price movements in stocks.
When you buy an individual bond, you derive income from
different sources. They are:
D. All of the above
While all bonds are subject to interest rate risk, that risk is
correlated to maturity length. As maturity length increases, so do
potential price fluctuations. Conversely, the _____ the maturity of
the bond you buy, the _____ the risk of price fluctuations as a
result of changes in interest rate levels.
A. shorter; lower
Assume that you own a 2-year, 10-year and 30-year bond (years to
maturity) and all of the same quality. All have the same coupon
rate = 7%. The only difference in the bonds is in the years to
maturity. Further assume that required YTM on all of these bonds
increases by 2 percent and that you observe the following changes
in prices on these bonds:
C. 30-year bond as highest maturity has hg=ighest
duration and hence highest price change with change in yields