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

Question

Quizplus · Accepted Answer

Technical analysis is based on the assumption that security prices adjust gradually to new information, allowing patterns and trends to form that can be used to predict future price movements.

An Important Assumption Underlying the Use of Technical Analysis Techniques