Question 5—Fundamental and Technical Analysis
Answer 2 Selection “Having precise information about the fundamentals tells you exactly which way a stock is going to go” is incorrect.
Having precise information about the fundamentals does not forecast exactly which way a stock is going to go. The problem with fundamental analysis is that values change slowly but prices fluctuate fast. In the short run, prices can even move against the fundamentals. Whether you are primarily a fundamentalist or a technician, you want to know how the other side lives and thinks. Having both a fundamental and a technical view of a stock provides a deeper understanding of its trends and reversals.
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