Session 31_ Post-class test

2 which of the following statements best describes

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Unformatted text preview: hen volatility increases but go up in the subsequent period. d. Stocks go down in period when volatility increases and continue to go down in the subsequent period. Solution 1. Assume that you are looking for a good market indicator to use in market timing. Which of the following would you want in the indicator? a. The indicator should provide a buy (sell) signal after stocks have gone up (down). b. The indicator should provide a buy (sell) signal as stocks are going up (down). c. The indicator should provide a buy (sell) signal before stocks go up (down). Explanation: You want a market indicator that tells you ahead of time whether stocks will go up or down. If you get a contemporaneous or lagging indicator, you cannot invest based upon it. 2. Which of the following statements best describes the January indicato...
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This note was uploaded on 10/10/2013 for the course ECON 304 taught by Professor Aswathdamodaran during the Spring '12 term at NYU.

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