Due to the length of the question, I won’t copy the entire readings to this post. The question that I am referring to is in the practice problems #15 of the 2020 CFA Institutes Level III Curriculum Book 2, Reading 9 Behavioral Finance and Investment Processes.
The reading gave three different opinions on the technical analysis department of an investment firm and the question asked which statement is most accurate.
The solution said: Momentum can be partly explained by short-term under-reaction to relevant information, and longer term over-reaction and thus supports Rodriguez’s view that the technical analysis department has value.
The solution does not help at all. I’m not quite sure which knowledge point is this question referring to and what is the logic behind the accurateness of such statement. In my view, CFA curriculum seldom to make a clear preference of efficient market theory or definitively state whether technical/fundamental analysis would work. Am I misunderstand what the question is asking? Can anyone explain further regarding this question?