Question 1

When technical analysts say a stock has good "relative strength",they mean that in the recent past __________.

Accepted Answer

A)  it has performed well compared to its closest competitors 
B)  it has exceeded its own historical high 
C)  trading volume in the stock has exceeded the normal trading volume 
D)  it has outperformed the market index 
A)  it has performed well compared to its closest competitors 
B)  it has exceeded its own historical high 
C)  trading volume in the stock has exceeded the normal trading volume 
D)  it has outperformed the market index

Question 2

According to Kondratieff,the macroeconomy moves in a series of waves that recur at intervals of approximately _________________.

Accepted Answer

A)  18 months 
B)  4 years 
C)  8 years 
D)  50 years 
A)  18 months 
B)  4 years 
C)  8 years 
D)  50 years

Question 3

The only way for behavioral patterns to persist in prices is if ______________.

Accepted Answer

A)  markets are not weak form efficient 
B)  there are limits to arbitrage activity 
C)  there are no significant trading costs 
D)  market psychology is inconsistent over time 
A)  markets are not weak form efficient 
B)  there are limits to arbitrage activity 
C)  there are no significant trading costs 
D)  market psychology is inconsistent over time

Question 4

According to market technicians a trin statistic of less than 1.0 is considered as a __________.

Accepted Answer

A)  bearish signal 
B)  bullish signal 
C)  volume decline 
D)  signal reversal 
A)  bearish signal 
B)  bullish signal 
C)  volume decline 
D)  signal reversal

Question 5

According to the Dow Theory,secondary trends are _________________.

Accepted Answer

A)  points of trend reversals 
B)  daily fluctuations which are of little importance 
C)  short-term deviations from the underlying price trend line 
D)  long-term price movements lasting from months to years 
A)  points of trend reversals 
B)  daily fluctuations which are of little importance 
C)  short-term deviations from the underlying price trend line 
D)  long-term price movements lasting from months to years

Question 6

The Breadth on day three is _______.

Accepted Answer

A)  -70 
B)  10 
C)  90 
D)  170 
A)  -70 
B)  10 
C)  90 
D)  170

Question 7

In the context of a point and figure chart,a horizontal band of Xs and Os is a _____________.

Accepted Answer

A)  buy signal 
B)  sell signal 
C)  congestion area 
D)  trend reversal 
A)  buy signal 
B)  sell signal 
C)  congestion area 
D)  trend reversal

Question 8

Trend analysts that follow bonds are most likely to monitor the ____________.

Accepted Answer

A)  confidence index 
B)  odd-lot trading 
C)  short interest 
D)  trin statistic 
A)  confidence index 
B)  odd-lot trading 
C)  short interest 
D)  trin statistic

Question 9

Trading activity and average returns in brokerage accounts tends to be _________.

Accepted Answer

A)  uncorrelated 
B)  negatively correlated 
C)  positively correlated 
D)  positively correlated for women and negatively correlated for men 
A)  uncorrelated 
B)  negatively correlated 
C)  positively correlated 
D)  positively correlated for women and negatively correlated for men

Question 10

An accumulation of cash by mutual funds may be viewed by technical traders as a __________ indicator.

Accepted Answer

A)  bullish 
B)  neutral 
C)  bearish 
D)  trend reversal 
A)  bullish 
B)  neutral 
C)  bearish 
D)  trend reversal

Question 11

From day one to day four,the Trin has ___ and is ___.

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 12

The moving average generates buy signal(s)

Accepted Answer

A)  on days 3, 11 and 15 
B)  on days 2 and 16 
C)  on days 5, 9 and 13 
D)  on no days 
A)  on days 3, 11 and 15 
B)  on days 2 and 16 
C)  on days 5, 9 and 13 
D)  on no days

Question 13

The moving average generates sell signals

Accepted Answer

A)  on days 3, 11 and 15 
B)  on days 7, 15, and 18 
C)  on days 5, 9 and 13 
D)  on day 16 
A)  on days 3, 11 and 15 
B)  on days 7, 15, and 18 
C)  on days 5, 9 and 13 
D)  on day 16

Question 14

In 1997 CSX successfully purchased a significant share of Conrail.Immediately after the first offer was announced and the acquisition eventually consummated,the price of CSX fell below pre-acquisition levels and took many years to recover.This may be an example of ________________.

Accepted Answer

A)  loss aversion 
B)  mental accounting 
C)  overreaction 
D)  managerial overconfidence 
A)  loss aversion 
B)  mental accounting 
C)  overreaction 
D)  managerial overconfidence

Question 15

A _________ is a value above which it is difficult for the market to rise.

Accepted Answer

A)  book value 
B)  resistance level 
C)  support level 
D)  confidence level 
A)  book value 
B)  resistance level 
C)  support level 
D)  confidence level

Question 16

Identify the support level stock price.

Accepted Answer

A)  $40 
B)  $42 
C)  $44 
D)  $46 
A)  $40 
B)  $42 
C)  $44 
D)  $46

Question 17

On day 1,the stock price of Ford was $81 and the automotive stock index was 324.On day 2,the stock price of Ford was $85 and the automotive stock index was 335.Consider the ratio of Ford to the automotive stock index at day 1 and day 2.Ford is __________ the automotive industry and technical analysts who follow relative strength would advise __________ the stock.

Accepted Answer

A)  outperforming, buying 
B)  outperforming, selling 
C)  underperforming, buying 
D)  underperforming, selling 
A)  outperforming, buying 
B)  outperforming, selling 
C)  underperforming, buying 
D)  underperforming, selling

Question 18

The ratio of the average yield on 10 top-rated corporate bonds to the average yield on 10 intermediate-grade bonds is called the __________.

Accepted Answer

A)  bond price index 
B)  confidence index 
C)  relative strength index 
D)  trin ratio 
A)  bond price index 
B)  confidence index 
C)  relative strength index 
D)  trin ratio

Question 19

According to the Dow Theory,tertiary trends are _________________.

Accepted Answer

A)  points of trend reversals 
B)  daily fluctuations which are of little importance 
C)  short-term deviations from the underlying price trend line 
D)  long-term price movements lasting from months to years 
A)  points of trend reversals 
B)  daily fluctuations which are of little importance 
C)  short-term deviations from the underlying price trend line 
D)  long-term price movements lasting from months to years

Question 20

Moving averages are ______ indicators.

Accepted Answer

A)  sentiment 
B)  flow of funds 
C)  trend 
D)  fundamental 
A)  sentiment 
B)  flow of funds 
C)  trend 
D)  fundamental

Exam 9: Behavioral Finance and Technical Analysis

When technical analysts say a stock has good "relative strength",they mean that in the recent past __________.

According to Kondratieff,the macroeconomy moves in a series of waves that recur at intervals of approximately _________________.

The only way for behavioral patterns to persist in prices is if ______________.

According to market technicians a trin statistic of less than 1.0 is considered as a __________.

According to the Dow Theory,secondary trends are _________________.

The Breadth on day three is _______.

In the context of a point and figure chart,a horizontal band of Xs and Os is a _____________.

Trend analysts that follow bonds are most likely to monitor the ____________.

Trading activity and average returns in brokerage accounts tends to be _________.

An accumulation of cash by mutual funds may be viewed by technical traders as a __________ indicator.

From day one to day four,the Trin has ___ and is ___.

The moving average generates buy signal(s)

The moving average generates sell signals

In 1997 CSX successfully purchased a significant share of Conrail.Immediately after the first offer was announced and the acquisition eventually consummated,the price of CSX fell below pre-acquisition levels and took many years to recover.This may be an example of ________________.

A _________ is a value above which it is difficult for the market to rise.

Identify the support level stock price.

The ratio of the average yield on 10 top-rated corporate bonds to the average yield on 10 intermediate-grade bonds is called the __________.

According to the Dow Theory,tertiary trends are _________________.

Moving averages are ______ indicators.

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

Bond Prices and Yields

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation

Financial Statement Analysis

Options Markets

Option Valuation

Futures Markets and Risk Management

Portfolio Performance Evaluation

Globalization and International Investing

Hedge Funds

Taxes,inflation,and Investment Strategy

Investors and the Investment Process

Filters

From day one to day four,the Trin has _ and is _.