What is the purpose of technical analysis? Explain how and why it is used by technicians; note how it can be helpful in timing investment decisions.
Answer to relevant QuestionsCan the market really have a measurable effect on the price behavior of individual securities? Explain. Briefly define each of the following terms and describe how it can affect investors’ decisions. a. Loss aversion b. Representativeness c. Narrow framing d. Overconfidence e. Biased self-attribution Listed below are data that pertain to the corporate bond market. a. Compute the confidence index for each of the 4 periods listed above. b. Assume that the latest confidence index (for period 0, in effect) amounts to ...Briefly describe each of the following types of bonds: (a) Treasury bonds, (b) Agency issues, (c) Municipal securities, and (d) Corporate bonds. Note some of the major advantages and disadvantages of each. How would you describe the behavior of market interest rates and bond returns over the last 30 years? Do swings in market interest rates have any bearing on bond returns? Explain.
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