Question 1

On a particular day,there were odd-lot sales of 805,000 on the TSX and 948,000 odd-lot purchases.The odd-lot trading index is __________.

Accepted Answer

A)  0.46 
B)  0.54 
C)  0.85 
D)  1.18 
A)  0.46 
B)  0.54 
C)  0.85 
D)  1.18

Question 2

The put/call ratio is computed as ____________ and higher values are considered ____________ signals.

Accepted Answer

A)  the number of outstanding put options divided by outstanding call options;bullish or bearish 
B)  the number of outstanding put options divided by outstanding call options;bullish 
C)  the number of outstanding put options divided by outstanding call options;bearish 
D)  the number of outstanding call options divided by outstanding put options;bullish 
E)  the number of outstanding call options divided by outstanding put options;bearish 
A)  the number of outstanding put options divided by outstanding call options;bullish or bearish 
B)  the number of outstanding put options divided by outstanding call options;bullish 
C)  the number of outstanding put options divided by outstanding call options;bearish 
D)  the number of outstanding call options divided by outstanding put options;bullish 
E)  the number of outstanding call options divided by outstanding put options;bearish

Question 3

The Dow theory posits that the three forces that simultaneously affect stock prices are ____________.
I.primary trend
II.intermediate trend
III.momentum trend
IV.minor trend
V.contrarian trend

Accepted Answer

A)  I,II,and III 
B)  II,III,and IV 
C)  III,IV and V 
D)  I,II,and IV 
E)  I,III,and V 
A)  I,II,and III 
B)  II,III,and IV 
C)  III,IV and V 
D)  I,II,and IV 
E)  I,III,and V

Question 4

According to technical analysts,a shift in market fundamentals will ___________.

Accepted Answer

A)  be reflected in stock prices immediately 
B)  lead to a gradual price change that can be recognized as a trend 
C)  lead to high volatility in stock market prices 
D)  do none of these 
A)  be reflected in stock prices immediately 
B)  lead to a gradual price change that can be recognized as a trend 
C)  lead to high volatility in stock market prices 
D)  do none of these

Question 5

According to Dow theory,secondary trends are _________________.

Accepted Answer

A)  daily fluctuations which are of little importance 
B)  short-term deviations from the underlying price trend line 
C)  long-term price movements lasting from months to years 
D)  none of these 
A)  daily fluctuations which are of little importance 
B)  short-term deviations from the underlying price trend line 
C)  long-term price movements lasting from months to years 
D)  none of these

Question 6

An accumulation of credit balances in brokerage accounts is viewed by technical traders as a __________ indicator.

Accepted Answer

A)  bullish 
B)  neutral 
C)  bearish 
D)  none of these 
A)  bullish 
B)  neutral 
C)  bearish 
D)  none of these

Question 7

According to Dow theory,tertiary trends are __________________.

Accepted Answer

A)  daily fluctuations which are of little importance 
B)  short-term deviations from the underlying price trend line 
C)  long-term price movements lasting from months to years 
D)  none of these 
A)  daily fluctuations which are of little importance 
B)  short-term deviations from the underlying price trend line 
C)  long-term price movements lasting from months to years 
D)  none of these

Question 8

According to Dow theory there are _____ key forces which simultaneously affect stock prices.

Accepted Answer

A)  2 
B)  3 
C)  4 
D)  5 
A)  2 
B)  3 
C)  4 
D)  5

Question 9

A long term movement of prices,lasting from several months to years is called __________.

Accepted Answer

A)  a minor trend 
B)  an intermediate trend 
C)  a primary trend 
D)  none of these 
A)  a minor trend 
B)  an intermediate trend 
C)  a primary trend 
D)  none of these

Question 10

__________ was the grandfather of technical analysis.

Accepted Answer

A)  Harry Markowitz 
B)  William Sharpe 
C)  Charles Dow 
D)  Benjamin Graham 
E)  none of these 
A)  Harry Markowitz 
B)  William Sharpe 
C)  Charles Dow 
D)  Benjamin Graham 
E)  none of these

Question 11

Technical traders view mutual fund investors as __________ market timers.

Accepted Answer

A)  excellent 
B)  mediocre 
C)  neutral 
D)  poor 
A)  excellent 
B)  mediocre 
C)  neutral 
D)  poor

Question 12

The ratio of (the average yield on 10 top-rated corporate bonds/the average yield on 10 intermediate-grade bonds)is called _________.

Accepted Answer

A)  the bond price index 
B)  the confidence index 
C)  the relative strength index 
D)  none of these 
A)  the bond price index 
B)  the confidence index 
C)  the relative strength index 
D)  none of these

Question 13

Generally,academics reject technical analysis as a means of forecasting security prices.Give some reasons to support this position and suggest some possible defenses of the approach.

Accepted Answer

The notion is contrary to the weak form

Question 14

If a person gives too much weight to recent information compared to prior beliefs,they would make ________ errors.

Accepted Answer

A)  framing 
B)  selection bias 
C)  overconfidence 
D)  conservatism 
E)  forecasting 
A)  framing 
B)  selection bias 
C)  overconfidence 
D)  conservatism 
E)  forecasting

Question 15

_____________ on the Dow theory.

Accepted Answer

A)  The Elliot wave theory is a recent variation 
B)  the theory of Kondratieff waves is a recent variation 
C)  both the Elliot wave theory and the theory of Kondratieff waves are recent variations 
D)  neither the Elliot wave theory and theory of Kondratieff waves are recent variations 
A)  The Elliot wave theory is a recent variation 
B)  the theory of Kondratieff waves is a recent variation 
C)  both the Elliot wave theory and the theory of Kondratieff waves are recent variations 
D)  neither the Elliot wave theory and theory of Kondratieff waves are recent variations

Question 16

At the end of July,the average yields on 10 top-rated corporate bonds and 10 intermediate-grade bonds were 7.65% and 8.48% respectively.At the end of August,the average yields on 10 top-rated corporate bonds and 10 intermediate-grade bonds were 6.31% and 6.71% respectively.The confidence index __________ during August and technical analysts are likely to be ________.

Accepted Answer

A)  increased,bullish 
B)  increased,bearish 
C)  decreased,bullish 
D)  decreased,bearish 
A)  increased,bullish 
B)  increased,bearish 
C)  decreased,bullish 
D)  decreased,bearish

Question 17

According to the odd-lot theory,an odd-lot trading index of less than 1.0 is considered as a __________.

Accepted Answer

A)  bearish signal 
B)  bullish signal 
C)  bearish signal by some technical analysts and as a bullish signal by other technical analysts 
D)  none of these 
A)  bearish signal 
B)  bullish signal 
C)  bearish signal by some technical analysts and as a bullish signal by other technical analysts 
D)  none of these

Question 18

A trin ratio of less than 1.0 is considered as a _________.

Accepted Answer

A)  bearish signal 
B)  bullish signal 
C)  bearish signal by some technical analysts and as a bullish signal by other technical analysts 
D)  none of these 
A)  bearish signal 
B)  bullish signal 
C)  bearish signal by some technical analysts and as a bullish signal by other technical analysts 
D)  none of these

Question 19

An important assumption underlying the use of technical analysis techniques is that _________________.

Accepted Answer

A)  security prices adjust rapidly to new information 
B)  security prices adjust gradually to new information 
C)  security dealers will provide enough liquidity to keep price changes relatively small 
D)  all investors have immediate and costless access to information 
A)  security prices adjust rapidly to new information 
B)  security prices adjust gradually to new information 
C)  security dealers will provide enough liquidity to keep price changes relatively small 
D)  all investors have immediate and costless access to information

Question 20

The advance-decline line is constructed by plotting __________________.

Accepted Answer

A)  the number of advancing stocks against the number of declining stocks 
B)  the number of advancing stocks and the number of declining stocks against time 
C)  the number of advancing stocks minus the number of declining stocks against time 
D)  the cumulative total of advances minus declines against time 
A)  the number of advancing stocks against the number of declining stocks 
B)  the number of advancing stocks and the number of declining stocks against time 
C)  the number of advancing stocks minus the number of declining stocks against time 
D)  the cumulative total of advances minus declines against time

Exam 10: Bond Prices and Yield

On a particular day,there were odd-lot sales of 805,000 on the TSX and 948,000 odd-lot purchases.The odd-lot trading index is __________.

The put/call ratio is computed as ____________ and higher values are considered ____________ signals.

The Dow theory posits that the three forces that simultaneously affect stock prices are ____________. I.primary trend II.intermediate trend III.momentum trend IV.minor trend V.contrarian trend

According to technical analysts,a shift in market fundamentals will ___________.

According to Dow theory,secondary trends are _________________.

An accumulation of credit balances in brokerage accounts is viewed by technical traders as a __________ indicator.

According to Dow theory,tertiary trends are __________________.

According to Dow theory there are _____ key forces which simultaneously affect stock prices.

A long term movement of prices,lasting from several months to years is called __________.

__________ was the grandfather of technical analysis.

Technical traders view mutual fund investors as __________ market timers.

The ratio of (the average yield on 10 top-rated corporate bonds/the average yield on 10 intermediate-grade bonds)is called _________.

Generally,academics reject technical analysis as a means of forecasting security prices.Give some reasons to support this position and suggest some possible defenses of the approach.

If a person gives too much weight to recent information compared to prior beliefs,they would make ________ errors.

_____________ on the Dow theory.

According to the odd-lot theory,an odd-lot trading index of less than 1.0 is considered as a __________.

A trin ratio of less than 1.0 is considered as a _________.

An important assumption underlying the use of technical analysis techniques is that _________________.

The advance-decline line is constructed by plotting __________________.

Investments: Background and Issues

Asset Classes and Financial Instruments

Securities Markets

Mutual Funds and Other Investment Companies

Risk and Return: Past and Prologue

Efficient Diversification

Capital Asset Pricing and Arbitrage Pricing Theory

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation

Financial Statement Analysis

Options Markets

Option Valuation

Futures Markets and Risk Management

Performance Evaluation and Active Portfolio Management

Globalization and International Investing

Taxes, Inflation, and Investment Strategy

Investors and the Investment Process

Mutual Fund: Objectives, Types, NAV, Turnover Ratio, and More

International Finance and Investments: Understanding Foreign Markets and Risks

Filters

The put/call ratio is computed as and higher values are considered signals.