Which of the following statements is most correct?
A) Technical analysis concerns itself with determining the intrinsic value of a stock.
B) Active investing is defined as buying and selling stock within six months.
C) Fundamental analysis attempts to value a company by examining the past prices patterns of a company's stock.
D) Individuals who engage in technical analysis by definition do not subscribe to the weak form of the efficient market hypothesis.

Question

Quizplus · Accepted Answer

Individuals who engage in technical analysis may subscribe to the semi-strong or strong form of the efficient market hypothesis but not the weak form. Technical analysis is based on the premise that past price and volume data can help predict future price movements, which contradicts the weak form of the efficient market hypothesis that states that all historical prices are already reflected in the current stock price. Option A is incorrect because technical analysis focuses on the analysis of price and volume data rather than intrinsic value. Option B is incorrect because active investing can be defined as buying and selling stocks frequently, but the time frame can vary depending on the investor's strategies. Option C is incorrect because fundamental analysis seeks to value a company by examining its financial statements, industry trends, and macroeconomic indicators, among others, rather than the past price patterns of its stock.

Which of the Following Statements Is Most Correct