Technical analysts are most likely to be successful in a market that is considered to be:
A) semistrong-form efficient.
B) strong-form efficient.
C) less than weak-form efficient.
D)a random walk.

Question

Quizplus · Accepted Answer

Technical analysis is the study of past market data, such as price and volume, to forecast future price movements. It assumes that historical trends and patterns can be used to predict future market movements. Therefore, technical analysis is more likely to be successful in a market that is less than weak-form efficient, meaning that past information is not fully reflected in current prices. In a perfectly efficient market (semistrong and strong form), past market data is already incorporated into current prices, making it difficult for technical analysis to find any predictable patterns. In a completely random market, technical analysis would also not be effective as there would be no pattern to analyze.

Technical Analysts Are Most Likely to Be Successful in a Market