Management Aptitude Test Sep 2011 Paper
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Directions
(Q. Nos. 37 to 40) Each of these questions has a group o f sentences marked A, B, C, D and E. Arrange these to form a logical sequence.
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Question : 37 of 200
Marks:
+1,
-0
A. Many so-called indicators for stocks and indexes take on complex hues, such as taking on moving averages of moving averages and so on.
B. A moving-average-based indicator will always be a little late, and you should naturally be suspicious of any ‘formula’ that can predict the next move, based purely on moving averages of price.
C. The moving average is simply a “smoothing” function — it gets rid of periodic volatility to tell you the recent trend.
D. At best, they can tell you a trend, and if the hypothesis is that the trend will sustain, and that bears out historically in enough instances, you might have a hope with it.
E. But smoothing has its disadvantages; it reacts slowly to sudden changes, so it will only tell you that the trend has changed after the trend has changed, sometimes too late to actually take action.
B. A moving-average-based indicator will always be a little late, and you should naturally be suspicious of any ‘formula’ that can predict the next move, based purely on moving averages of price.
C. The moving average is simply a “smoothing” function — it gets rid of periodic volatility to tell you the recent trend.
D. At best, they can tell you a trend, and if the hypothesis is that the trend will sustain, and that bears out historically in enough instances, you might have a hope with it.
E. But smoothing has its disadvantages; it reacts slowly to sudden changes, so it will only tell you that the trend has changed after the trend has changed, sometimes too late to actually take action.
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