Technical analysts do not expect ________ to be as abrupt as do fundamental analysts.
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A. B. C. D.D
Technicians do not expect the price adjustment to be as abrupt as fundamental analysts and efficient market supporters do, but expect a gradual adjustment to reflect the gradual flow of information.
In the context of technical analysis and fundamental analysis, the question is asking about the expectations of technical analysts compared to fundamental analysts regarding a certain type of adjustment.
Technical analysts primarily focus on studying price and volume data to identify patterns and trends in financial markets. They use charts and technical indicators to make predictions about future price movements. On the other hand, fundamental analysts analyze the underlying factors and financial statements of a company to determine its intrinsic value and make investment decisions based on the company's fundamentals.
The question suggests that there is a difference in expectations between technical analysts and fundamental analysts regarding the abruptness of a certain type of adjustment. Let's analyze each answer choice to find the correct one:
A. Income adjustments: Fundamental analysts analyze a company's income statements to evaluate its profitability and financial performance. They may expect income adjustments to be abrupt if there are significant changes in the company's revenue or expenses. However, the question states that technical analysts do not expect this type of adjustment to be as abrupt as fundamental analysts, which means option A is not the correct answer.
B. None of these answers: This option implies that none of the given answer choices is correct. However, we should evaluate the remaining options before concluding that this is the correct answer.
C. Return adjustments: Return adjustments could refer to changes in the expected return of an investment or changes in the historical returns of a financial instrument. Fundamental analysts may consider various factors, such as changes in interest rates, economic conditions, or industry trends, to evaluate return adjustments. It is possible that technical analysts have a different expectation regarding the abruptness of return adjustments compared to fundamental analysts. However, without further context, it is not possible to determine if technical analysts expect return adjustments to be more or less abrupt than fundamental analysts. Therefore, option C cannot be confidently determined as the correct answer.
D. Price adjustments: Technical analysts primarily focus on analyzing historical price data and patterns to predict future price movements. They believe that price movements follow trends and patterns and use tools like support and resistance levels, moving averages, and chart patterns to make investment decisions. Since technical analysts focus on price movements, it is reasonable to expect that they may have a more immediate expectation regarding the abruptness of price adjustments compared to fundamental analysts. Therefore, option D, "price adjustments," is the most likely correct answer.
In summary, based on the information provided, the correct answer to the question appears to be D. Technical analysts do not expect price adjustments to be as abrupt as fundamental analysts.