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Which of the following accurately summarizes the empirical evidence about technical
analysis?
A) Technical analysts fare no better than other financial analysis—on average they do not
outperform the market.
B) Technical analysts tend to outperform other financial analysis, but on average they
nevertheless underperform the market.
C) Technical analysts fare no better than other financial analysis, and like other financial analysts
they outperform the market.
D) Technical analysts fare no better than other financial analysis, and like other financial
analysts they underperform the market.
Answer: A
Diff: 2 Type: MC Page Ref: 7A.1- 3
Topic: Questions for Web Appendix on the Efficient Market Hypothesis
Skill: Recall
Objective List: Appendix: Evidence on the Efficient Market Hypothesis
Evidence in support of the efficient markets hypothesis includes ____.
A) the failure of technical analysis to outperform the market
B) the small-firm effect
C) the January effect
D) excessive volatility
Answer: A
Diff: 1 Type: MC Page Ref: 7A.1- 3
Topic: Questions for Web Appendix on the Efficient Market Hypothesis
Skill: Recall
Objective List: Appendix: Evidence on the Efficient Market Hypothesis
Evidence against market efficiency includes ____.
A) failure of technical analysis to outperform the market
B) the random walk behavior of stock prices
C) the inability of mutual fund managers to consistently beat the market
D) the January effect
Answer: D
Diff: 1 Type: MC Page Ref: 7A.1- 4
Topic: Questions for Web Appendix on the Efficient Market Hypothesis
Skill: Recall
Objective List: Appendix: Evidence on the Efficient Market Hypothesis