Question 1

Advances and declines are associated with market

Accepted Answer

A)  Efficiency. 
B)  Position. 
C)  Diffusion. 
D)  Depth. 
E)  Breadth. 
A)  Efficiency. 
B)  Position. 
C)  Diffusion. 
D)  Depth. 
E)  Breadth.

Question 2

An increase in debit balances in brokerage accounts is viewed by technicians as a bullish sign.

Accepted Answer

A) True 
 B)False

Question 3

A technical analyst might use credit balances in brokerage accounts as follows:

Accepted Answer

A)  Sell stock when credit balances rise 
B)  Buy stock when credit balances rise 
C)  Sell stock when credit balances decline 
D)  b and c 
E)  None of the above 
A)  Sell stock when credit balances rise 
B)  Buy stock when credit balances rise 
C)  Sell stock when credit balances decline 
D)  b and c 
E)  None of the above

Question 4

The ratio of OTC volume versus NYSE volume is a measure of ____.This ratio typically ____ at a market ____.

Accepted Answer

A)  Speculative activity, bottoms, peak. 
B)  Hedging activity, bottoms, peak. 
C)  Speculative activity, peaks, peak 
D)  Speculative activity, bottoms, bottoms. 
E)  None of the above. 
A)  Speculative activity, bottoms, peak. 
B)  Hedging activity, bottoms, peak. 
C)  Speculative activity, peaks, peak 
D)  Speculative activity, bottoms, bottoms. 
E)  None of the above.

Question 5

A divergence between an increase in a stock market series and the rest of the stock market can be detected using

Accepted Answer

A)  Debit balances in brokerage accounts 
B)  Short interest 
C)  The advance-decline line 
D)  Confidence index 
E)  None of the above 
A)  Debit balances in brokerage accounts 
B)  Short interest 
C)  The advance-decline line 
D)  Confidence index 
E)  None of the above

Question 6

The market is considered to be overbought and subject to a negative correction when more than

Accepted Answer

A)  60% of the stocks are selling above their 90 day average. 
B)  70% of the stocks are selling above their 100 day average. 
C)  80% of the stocks are selling above their 200 day average. 
D)  70% of the stocks are selling above their 150 day average. 
E)  90% of the stocks are selling above their 150 day average. 
A)  60% of the stocks are selling above their 90 day average. 
B)  70% of the stocks are selling above their 100 day average. 
C)  80% of the stocks are selling above their 200 day average. 
D)  70% of the stocks are selling above their 150 day average. 
E)  90% of the stocks are selling above their 150 day average.

Question 7

When ____ of stocks are trading above the 200-day moving average,the market is considered ____,and subject to a ____.

Accepted Answer

A)  20%, oversold, negative correction 
B)  80%, overbought, negative correction 
C)  80%, oversold, positive correction 
D)  20%, overbought, positive correction 
E)  None of the above 
A)  20%, oversold, negative correction 
B)  80%, overbought, negative correction 
C)  80%, oversold, positive correction 
D)  20%, overbought, positive correction 
E)  None of the above

Question 8

When the 50 day MA line crosses the 200 day MA line from above it is considered a buy signal.

Accepted Answer

A) True 
 B)False

Question 9

The short interest ratio is the ratio between the number of shares sold short and not covered,and the

Accepted Answer

A)  Average number of stocks reaching new highs. 
B)  Average daily number of stocks that increased in value. 
C)  Average daily volume of trading on the exchange. 
D)  Average monthly volume of trading on the exchange. 
E)  Average number of shares outstanding in those stocks. 
A)  Average number of stocks reaching new highs. 
B)  Average daily number of stocks that increased in value. 
C)  Average daily volume of trading on the exchange. 
D)  Average monthly volume of trading on the exchange. 
E)  Average number of shares outstanding in those stocks.

Question 10

Exhibit 16.1
Use the Information Below for the Following Problem(S)
Daily closings for the Dow Jones Industrial Average are given in the table below.
 $$\begin{array} { c c } 
\text { Day } & \text { Price} \
\hline 1 & 9867 \
2 & 10025 \
3 & 10524 \
4 & 10210 \
5 & 10104 \
6 & 9925
\end{array}$$
-Refer to Exhibit 16.1.Calculate a 4-day moving average for day 5.

Accepted Answer

A)  10,102.3 
B)  9905.6 
C)  9875.4 
D)  10,215.7 
E)  10,157.6 
A)  10,102.3 
B)  9905.6 
C)  9875.4 
D)  10,215.7 
E)  10,157.6

Question 11

Which of the following assumptions regarding price movements summarized by Levy (1966)are controversial?

Accepted Answer

A)  Supply and demand determine the market value of any good or service. 
B)  Supply and demand are governed by numerous rational and irrational factors. 
C)  The prices for individual securities and the overall value of the market tend to move in trends. 
D)  All of the above assumptions are controversial. 
E)  None of the above assumptions are controversial. 
A)  Supply and demand determine the market value of any good or service. 
B)  Supply and demand are governed by numerous rational and irrational factors. 
C)  The prices for individual securities and the overall value of the market tend to move in trends. 
D)  All of the above assumptions are controversial. 
E)  None of the above assumptions are controversial.

Question 12

A technical analyst might consider the following as a bearish signal

Accepted Answer

A)  Investment advisory opinion is bearish 
B)  Investment advisory opinion is bullish 
C)  CBOE put-call ratio above 0.60 
D)  CBOE put-call ratio below 0.40 
E)  b and d 
A)  Investment advisory opinion is bearish 
B)  Investment advisory opinion is bullish 
C)  CBOE put-call ratio above 0.60 
D)  CBOE put-call ratio below 0.40 
E)  b and d

Question 13

Two major classes of technicians include the contrarians and those who "follow the smart money".

Accepted Answer

A) True 
 B)False

Question 14

A technical analyst might consider the following a bearish signal.

Accepted Answer

A)  The percentage of speculators in stock index futures exceeds 70%. 
B)  The percentage of speculators in stock index futures exceeds 30%. 
C)  The percentage of speculators in stock index futures falls to 30%. 
D)  The percentage of speculators in stock index futures remains flat. 
E)  None of the above. 
A)  The percentage of speculators in stock index futures exceeds 70%. 
B)  The percentage of speculators in stock index futures exceeds 30%. 
C)  The percentage of speculators in stock index futures falls to 30%. 
D)  The percentage of speculators in stock index futures remains flat. 
E)  None of the above.

Question 15

According to Dow Theory,a major market

Accepted Answer

A)  Advance has few price fluctuations indicate a new upward trend. 
B)  Advance does not go straight up, because some investors will take profits. 
C)  Decline is easier to predict than an advance. 
D)  Decline typically has a higher level of volume than a major market advance. 
E)  Both a and d. 
A)  Advance has few price fluctuations indicate a new upward trend. 
B)  Advance does not go straight up, because some investors will take profits. 
C)  Decline is easier to predict than an advance. 
D)  Decline typically has a higher level of volume than a major market advance. 
E)  Both a and d.

Question 16

When the 50 day moving average crosses the 200 day moving average from ____ on ____ volume,this would be a ____ signal.

Accepted Answer

A)  Above, low, bullish. 
B)  below, high, bearish. 
C)  below, low, bullish. 
D)  above, high, bullish. 
E)  below, high, bullish. 
A)  Above, low, bullish. 
B)  below, high, bearish. 
C)  below, low, bullish. 
D)  above, high, bullish. 
E)  below, high, bullish.

Question 17

Exhibit 16.2
Use the Information Below for the Following Problem(S)
The table below provides five days of trade data.
                    $\text { Issues }$
$\begin{array}{ccccc}
\text { Day } & \text { Traded } & \text { Advances } & \text { Declines } & \text { Unchanged } \
\hline 1 & 22456 & 15698 & 6158 & 600 \
2 & 23013 & 14560 & 8210 & 243 \
3 & 23124 & 10324 & 12678 & 122 \
4 & 22678 & 9867 & 11567 & 1244 \
5 & 21897 & 8678 & 12561 & 658
\end{array}$
-Refer to Exhibit 16.2.Calculate the net advance-decline for day 5.

Accepted Answer

A)  -3,883 
B)  9,540 
C)  -2,354 
D)  13,356 
E)  7,953 
A)  -3,883 
B)  9,540 
C)  -2,354 
D)  13,356 
E)  7,953

Question 18

The relative strength ratio for a stock can be computed by dividing the value of the S&P 500 stock index by the price of a stock.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a technical trading rule category?

Accepted Answer

A)  Contrary-opinion rules 
B)  Follow the smart money rules 
C)  Anti-fundamental and anti-portfolio approaches 
D)  Stock price and volume techniques 
E)  Other market environment indicators 
A)  Contrary-opinion rules 
B)  Follow the smart money rules 
C)  Anti-fundamental and anti-portfolio approaches 
D)  Stock price and volume techniques 
E)  Other market environment indicators

Question 20

A type of charting which normally disregards both time and volume is the

Accepted Answer

A)  Bar chart. 
B)  Point and figure chart. 
C)  Pie chart. 
D)  Histogram. 
E)  A linear regression graph. 
A)  Bar chart. 
B)  Point and figure chart. 
C)  Pie chart. 
D)  Histogram. 
E)  A linear regression graph.

Exam 16: Technical Analysis

Advances and declines are associated with market

An increase in debit balances in brokerage accounts is viewed by technicians as a bullish sign.

A technical analyst might use credit balances in brokerage accounts as follows:

The ratio of OTC volume versus NYSE volume is a measure of ____.This ratio typically ____ at a market ____.

A divergence between an increase in a stock market series and the rest of the stock market can be detected using

The market is considered to be overbought and subject to a negative correction when more than

When ____ of stocks are trading above the 200-day moving average,the market is considered ____,and subject to a ____.

When the 50 day MA line crosses the 200 day MA line from above it is considered a buy signal.

The short interest ratio is the ratio between the number of shares sold short and not covered,and the

Exhibit 16.1 Use the Information Below for the Following Problem(S) Daily closings for the Dow Jones Industrial Average are given in the table below. Day Price 1 9867 2 10025 3 10524 4 10210 5 10104 6 9925 -Refer to Exhibit 16.1.Calculate a 4-day moving average for day 5.

Which of the following assumptions regarding price movements summarized by Levy (1966)are controversial?

A technical analyst might consider the following as a bearish signal

Two major classes of technicians include the contrarians and those who "follow the smart money".

A technical analyst might consider the following a bearish signal.

According to Dow Theory,a major market

When the 50 day moving average crosses the 200 day moving average from ____ on ____ volume,this would be a ____ signal.

The relative strength ratio for a stock can be computed by dividing the value of the S&P 500 stock index by the price of a stock.

Which of the following is not a technical trading rule category?

A type of charting which normally disregards both time and volume is the

An Overview of the Investment Process

The Asset Allocation Decision

The Global Market Investment Decision

Securities Markets: Organization and Operation

Security-Market Indexes

Efficient Capital Markets

An Introduction to Portfolio Management

An Introduction to Asset Pricing Models

Multifactor Models of Risk and Return

Analysis of Financial Statements

Security Valuation Principles

Macroanalysis and Microvaluation of the Stock Market

Industry Analysis

Company Analysis and Stock Valuation

Equity Portfolio Management Stragtegies

Bond Fundamentals

The Analysis and Valuation of Bonds

Bond Portfolio Management Strategies

An Introduction to Derivative Markets and Securities

Forward and Futures Contracts

Option Contracts

Swap Contracts,convertible Securities,and Other Embedded Derivatives

Professional Money Management, alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Investment Return and Risk Analysis Questions

Investment and Retirement Plans

Calculating Covariance and Correlation Coefficient of Assets

Portfolio Variance and Stock Weight Calculations

Portfolio Optimization with Negative Correlation: Finding Minimum Variance and Weight Allocation

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The ratio of OTC volume versus NYSE volume is a measure of .This ratio typically at a market .

When of stocks are trading above the 200-day moving average,the market is considered ,and subject to a .

When the 50 day moving average crosses the 200 day moving average from on volume,this would be a signal.