Investments Lecture 5

According to Behavioral Finance...

• The price is always equal with the intrinsic value.
• Investors may make inconsistent or suboptimal decisions.
• Investors do not always process information correctly.
• EMH is true.

Monica from Friends liked the following papers(s):

• GOOGL
• AMZN
• SXZY
• PZZA

Behavioral biases would not matter if...

• Arbitrageurs could fully exploit the mistakes.
• Hedgers could fully exploit the mistakes.
• A good psychologist could take matters in hand.
• The markets were not efficient.

A strength of Technical Analysis is that...

• It is totally objective.
• The past necessarily explains the future
• It can very easily be algorithmized.
• Investors need to know the fundamentals.

The main tool(s) of Technical Analysis:

• Charts and Indicators
• Equity Valuation
• Algorithms
• The Brownian Motion

In Technical analysis support means:

• The price goes hardly below prior lows.
• The price goes hardly above prior highs.
• When the price breaks down, it becomes a resistance.
• When the price breaks out, it becomes a resistance.

Head&Shoulders in Technical Analysis is a/n...

• Shampoo against dandruff.
• Ascending pattern.
• Reversal pattern.
• descending pattern.

When we apply Moving Averages, if the current price crosses the average, it is a/n...

• Always a BUY signal.
• Always a SELL signal.
• SELL signal when the current price falls below the moving average.
• BUY signal when the current price rises above the moving average.

At Relative Strength Index (RSI)...

• a level above 70 indicates a stock is overbought.
• a level above 70 indicates a stock is oversold.
• a level below 30 indicates a stock is overbought.
• a level below 30 indicates a stock is oversold.

Which method is on the picture?

• Bollinger Bands
• RSI
• MACD
• Pora's Peanuts