Question 1

A support level is a price range:

Accepted Answer

A)   at which a significant increase in demand for a stock is expected.
B)   at which a significant increase in supply of a stock is expected.
C)   below which a stock price cannot go.
D)   above which a stock price cannot go.E) B) and C)
F) A) and D)

Question 2

Some recent research shows technical analysis may have some value. For example, Brown and Jennings (1989)  show investors can learn something about other investors by observing prices at which securities trade - i.e., prices reveal information and convey it. What other kinds of today's models open up the possibility of profitable trading strategies using technical analysis?

Accepted Answer

A)   Arbitrage.
B)   Trading Rules.
C)   Short-interest.
D)   Behavioral.E) A) and B)
F) B) and D)

Question 3

Relative strength analysis is popular because it is generally not subject to conflicting interpretations.

Accepted Answer

A) True 
 B)False

Question 4

The two primary tools of a technical analyst are:

Accepted Answer

A)   level of the market index and volume.
B)   economic indicators and level of the market index.
C)   price and earnings.
D)   price and volume.E) B) and C)
F) A) and D)

Question 5

A put/call ratio greater than the typical upper limit would be interpreted as a bullish signal by the contrarians.

Accepted Answer

A) True 
 B)False

Question 6

All of the following are assumptions made by technical analysts except:

Accepted Answer

A)   Changes in trend are caused by shifts in supply and demand relationships.
B)   Stock price movements are independent of one another.
C)   Security prices tend to move in trends.
D)   Supply and demand of securities are determined by various factors.E) None of the above
F) B) and D)

Question 7

What four factors should be considered in testing technical trading rules?

Accepted Answer

Risk, transactions c...

Question 8

One rule of thumb is that a stock is attractive when the relative strength has improved for at least ---------------months.

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) A) and B)
F) A) and C)

Question 9

Which of the following would be considered a strong bearish signal?

Accepted Answer

A)   High mutual fund liquidity
B)   Bullish advisory opinion
C)   Low short interest ratio
D)   Bearish advisory opinionE) All of the above
F) A) and B)

Question 10

What is the advance-decline line? What does it tell the technician?

Accepted Answer

The net advance for a day is the number ...

Question 11

Technical analysts agree with the fundamental analysts regarding the usefulness of accounting data.

Accepted Answer

A) True 
 B)False

Question 12

A put/call ratio of .70 indicates:

Accepted Answer

A)   puts have a cost 70% less than the cost of calls.
B)   there are 7 puts purchased for every one call purchased.
C)   there are 70% more puts purchased than calls.
D)   there are 7 puts purchased for every 10 calls purchased.E) A) and C)
F) A) and B)

Question 13

Which forms of the Efficient Market Hypothesis addresses the information used in technical and fundamental analysis? Do studies of technical analysis methods tend to support or refute the EMH?

Accepted Answer

The weak form EMH addresses market data ...

Question 14

What do technical analysts believe is the best source of data to use in analyzing stocks?:

Accepted Answer

A)   Corporate earnings growth prospects.
B)   Insider buying and selling of shares.
C)   Current P/E ratios versus historical ratios.
D)   The market itself.E) B) and D)
F) B) and C)

Question 15

Small changes in the put/call ratio are considered unimportant, whereas extreme changes convey information. Two rules of thumb are that a ratio greater than _________ based on a 10-day moving average would be excessively bearish and thus a buy signal, and a ratio of less than _____________ would be excessively bullish, and therefore a sell signal.

Accepted Answer

A)   0.70, 0.65
B)   0.80, 0.45
C)   0.90, 0.25
D)   0.95, 0.05E) All of the above
F) A) and B)

Question 16

How does a point-and-figure chart compress many price changes into a small space?

Accepted Answer

By recording only "significant...

Question 17

The breadth of the market is typically measured by which of the following:

Accepted Answer

A)   200-day moving average.
B)   50-day moving average.
C)   the put-call ratio.
D)   the advance-decline line.E) A) and B)
F) All of the above

Question 18

Which of the following is not true regarding the Dow Theory?

Accepted Answer

A)   It is intended to forecast the start of a primary movement.
B)   It does not forecast how long a movement will last.
C)   It has a very high success rate.
D)   It is subject to many criticisms.E) C) and D)
F) B) and C)

Question 19

Which of the following indicates the market is at its peak, according to contrarians?

Accepted Answer

A)   the short-interest ratio is low
B)   the bearish sentiment index is around 20 percent
C)   mutual fund liquidity is low
D)   all of the above would indicate a market peak to a contrarianE) B) and C)
F) None of the above

Exam 16: Technical Analysis

The breadth of the market is typically measured by which of the following:

Correct Answer
verified

The two primary tools of a technical analyst are:

Correct Answer
verified

Which of the following would be considered a strong bearish signal?

Correct Answer
verified

What is the advance-decline line? What does it tell the technician?

Correct Answer
verified
The net advance for a day is the number ...
View Answer

How does a point-and-figure chart compress many price changes into a small space?

Correct Answer
verified
By recording only "significant...
View Answer

What four factors should be considered in testing technical trading rules?

Correct Answer
verified
Risk, transactions c...
View Answer

Which forms of the Efficient Market Hypothesis addresses the information used in technical and fundamental analysis? Do studies of technical analysis methods tend to support or refute the EMH?

Correct Answer
verified
The weak form EMH addresses market data ...
View Answer

Correct Answer
verified

Which of the following is not true regarding the Dow Theory?

Correct Answer
verified

One rule of thumb is that a stock is attractive when the relative strength has improved for at least ---------------months.

Correct Answer
verified

Technical analysts agree with the fundamental analysts regarding the usefulness of accounting data.

Correct Answer
verified

What do technical analysts believe is the best source of data to use in analyzing stocks?:

Correct Answer
verified

Relative strength analysis is popular because it is generally not subject to conflicting interpretations.

Correct Answer
verified

Correct Answer
verified

A support level is a price range:

Correct Answer
verified

All of the following are assumptions made by technical analysts except:

Correct Answer
verified

A put/call ratio greater than the typical upper limit would be interpreted as a bullish signal by the contrarians.

Correct Answer
verified

Which of the following indicates the market is at its peak, according to contrarians?

Correct Answer
verified

A put/call ratio of .70 indicates:

Correct Answer
verified

Exam 16: Technical Analysis

The breadth of the market is typically measured by which of the following:

Correct AnswerverifiedShow Answer

The two primary tools of a technical analyst are:

Correct AnswerverifiedShow Answer

Which of the following would be considered a strong bearish signal?

Correct AnswerverifiedShow Answer

What is the advance-decline line? What does it tell the technician?

Correct AnswerverifiedThe net advance for a day is the number ...View AnswerShow Answer

How does a point-and-figure chart compress many price changes into a small space?

Correct AnswerverifiedBy recording only "significant...View AnswerShow Answer

What four factors should be considered in testing technical trading rules?

Correct AnswerverifiedRisk, transactions c...View AnswerShow Answer

Which forms of the Efficient Market Hypothesis addresses the information used in technical and fundamental analysis? Do studies of technical analysis methods tend to support or refute the EMH?

Correct AnswerverifiedThe weak form EMH addresses market data ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not true regarding the Dow Theory?

Correct AnswerverifiedShow Answer

One rule of thumb is that a stock is attractive when the relative strength has improved for at least ---------------months.

Correct AnswerverifiedShow Answer

Technical analysts agree with the fundamental analysts regarding the usefulness of accounting data.

Correct AnswerverifiedShow Answer

What do technical analysts believe is the best source of data to use in analyzing stocks?:

Correct AnswerverifiedShow Answer

Relative strength analysis is popular because it is generally not subject to conflicting interpretations.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A support level is a price range:

Correct AnswerverifiedShow Answer

All of the following are assumptions made by technical analysts except:

Correct AnswerverifiedShow Answer

A put/call ratio greater than the typical upper limit would be interpreted as a bullish signal by the contrarians.

Correct AnswerverifiedShow Answer

Which of the following indicates the market is at its peak, according to contrarians?

Correct AnswerverifiedShow Answer

A put/call ratio of .70 indicates:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The net advance for a day is the number ...
View Answer

Correct Answer
verified
By recording only "significant...
View Answer

Correct Answer
verified
Risk, transactions c...
View Answer

Correct Answer
verified
The weak form EMH addresses market data ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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