FINS1612 Chapter 7: Viney8e_IRM_ch07
Document Summary
At any moment, the balance between buyers and sellers of a company"s shares is determined by their assessments of the future profitability of a company and forecast movement in the share"s price. 1: upward pressures on wages growth relative to increases in productivity. Learning objective 7. 3: describe and apply technical analysis to forecasting movements in share prices: technical analysis adopts an alternative approach to share price forecasting. The approach is based on the assumption that, over time, apparent trends and patterns in share price movements are formed. The moving average is designed to smooth out the effects of intra-period volatility. An example might be the construction of a 10-day moving -averages model or a 30-day model: alternatively, a weighted model may be structured in order to give greater value to the most recent data observations. Therefore the most recent information will have a higher weight than earlier or past data.
