In a momentum trading strategy we:Group of answer choicesbuy recent winners and short-sell recent losers.buy recent losers and short-sell recent winners.buy high leverage stocks and short-sell low leverage stocks.buy stocks with high E/P ratio and short-sell stocks with low E/P ratio.
Question
In a momentum trading strategy we:Group of answer choicesbuy recent winners and short-sell recent losers.buy recent losers and short-sell recent winners.buy high leverage stocks and short-sell low leverage stocks.buy stocks with high E/P ratio and short-sell stocks with low E/P ratio.
Solution
In a momentum trading strategy, we buy recent winners and short-sell recent losers. This strategy is based on the idea that stocks which have recently gone up in price will continue to go up, and stocks which have recently gone down in price will continue to go down.
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