Question

If one strictly follows a momentum strategy by buying winners and sell losers, can one make...

If one strictly follows a momentum strategy by buying winners and sell losers, can one make money in a market when every stock is losing money such as during the crisis?

A. Yes

B. No

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

B. No

Besides analyzing a stock's intrinsic value, it is also very important to only buy a stock when its price is on an uptrend. Never buy a stock when the price is on a downtrend, no matter how good the stock is or how cheap the price may seem.

when a stock price is on a downtrend you never know how low it can go before it starts to recover. A cheap stock may become even cheaper in the short term.

When a stock is on an uptrend, it means that investors are getting more optimistic about it. This causes upward price momentum that drives the stock higher and higher. This will keep happening until a major news development changes the trend. It definitely makes sense to only buy a stock when it is on an uptrend because the probability is that it will keep going higher.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
During the financial crisis, every stock return is negative. In this case, _____ The momentum strategy...
During the financial crisis, every stock return is negative. In this case, _____ The momentum strategy cannot deliver positive return because every stock return is negative Not feasible to trade on the buy-winner-and-sell-loser momentum strategy because there are no winner stocks to buy None of the above One may still trade on the momentum strategy and earn positive return by buying stocks with smaller negative returns and short selling stocks with large negative returns
88) During the financial crisis, every stock return is negative. In this case, _____ One may...
88) During the financial crisis, every stock return is negative. In this case, _____ One may still trade on the momentum strategy and earn positive return by buying stocks with smaller negative returns and short selling stocks with large negative returns The momentum strategy cannot deliver positive return because every stock return is negative Not feasible to trade on the buy-winner-and-sell-loser momentum strategy because there are no winner stocks to buy None of the above
during a crisis such as hurricane sandy, governments often make it illegal to raise the price...
during a crisis such as hurricane sandy, governments often make it illegal to raise the price of emergency items like flashlights and bottled water. In practice, this means that these items get sold on a first-come/first-served basis. a. if a person has a flashlight that she values at $5, but its price on the black market is $40, what gains from trade are lost if the government shuts down the black market? b. why might a person want to sell...
Analyse the Case The stock market refers to markets that exist for issuing, buying, and selling...
Analyse the Case The stock market refers to markets that exist for issuing, buying, and selling stocks (equity shares) that trade on a stock exchange. An efficiently functioning stock market is considered critical to economic development, as it gives companies the ability to quickly access capital from the public. The stock market serves two very important purposes. The first is to provide capital to companies that they can use to fund and expand their businesses. The second purpose the stock...
Part U16 is used by Mcvean Corporation to make one of its products. A total of...
Part U16 is used by Mcvean Corporation to make one of its products. A total of 19,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 4.10 Direct labor $ 8.70 Variable manufacturing overhead $ 9.20 Supervisor's salary $ 4.60 Depreciation of special equipment $ 3.00 Allocated general overhead $ 8.20 An outside supplier has offered to...
10. Part U16 is used by Mcvean Corporation to make one of its products. A total...
10. Part U16 is used by Mcvean Corporation to make one of its products. A total of 13,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $2.90 Direct labor $7.50 Variable manufacturing overhead $8.00 Supervisor's salary $3.40 Depreciation of special equipment $1.80 Allocated general overhead $7.00 An outside supplier has offered to make the part and sell...
Buying any type of product or good is a sequential game in which the owner of...
Buying any type of product or good is a sequential game in which the owner of the product or good sets the price and then the buyer can buy, not buy, or counter and offer a new price.  This can be broken down into the following simple tree diagram: However, the determination of what Price A and Price B is is often a simultaneous game played between two or more competing companies. For example:   Taking this into consideration, imagine you are...
47.______How many intrinsic values can a stock have? a. one b. as many as it has...
47.______How many intrinsic values can a stock have? a. one b. as many as it has shares outstanding. c. as many as it has shares issued. d. as many as it has shares authorized. e. as many as it has people trying to determine that intrinsic value. 48._____You evaluated the stock of Apple (AAPL) on 1/17/20 and determine that its intrinsic value is $335. AAPL closed at $318.73 on 1/17/20 and traded in a range of $315.00 to $318.74. On...
(Bold or colour in your choice) 1)Which one of the following concerning a conservative financing strategy...
(Bold or colour in your choice) 1)Which one of the following concerning a conservative financing strategy is correct?       a. Short-term funds are used to a great extent.       b. . Only non-spontaneous debt financing is used       c. Long-term funds are only used to finance long-term needs.       d. It is a relatively expensive strategy       2) A firm can manage its cash conversion cycle by …       a. accelerating the collection of accounts receivable       b. stretching accounts...
Which of the following is false?Group of answer choices Product liability laws can make it unprofitable...
Which of the following is false?Group of answer choices Product liability laws can make it unprofitable to sell shoddy merchandise, providing a substantial incentive to provide safe products independent of government regulations. Asymmetric information exists when the available information is initially distributed in favor of one party to a transaction relative to another. In adverse selection situations, it is rational for a seller with more information about a product to provide a truthful and complete disclosure and make that fact...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT