- This topic has 2 replies, 2 voices, and was last updated 7 months ago by
.
- Posts
Gurdip plots the historic movements of share prices and uses this analysis to make her investment decisions.
Oliver believes that share prices reflect all relevant information at all times.
Match the level of capital markets efficiency that best reflects each of Gurdip and Oliver’s beliefs.Hello Sir,
I had a question. Could you please explain what technical analysis is? I cant seem to find it on study hub or any of the kits i own. I assumed gurdip would be weak form but apparently the answer was not efficient at all as he based his evaluation on technical analysis.
And what others could be asked?
I cant find it in the lecture notes either and this is a specimen exam question.Technical analysis is used for looking at past trends of share prices to identify future expected market values and potentially gain abnormal profits.
Gurdip’s belief reflects a market that is not efficient at all. Since technical analysis relies solely on past data, it implies that Gurdip believes the market is not efficient at all, as an efficient market would already have this information reflected in the current share prices.
Oliver’s belief reflects a strong form efficient market.
- You must be logged in to reply to this topic.