Question 1

To a technician that believed in the importance of volume, a bullish signal would occur when

Accepted Answer

A) Prices increase on light volume. 
B) Prices decrease on light volume. 
C) Prices increase on heavy volume. 
D) Prices decrease on heavy volume. 
E) None of the above. 
A) Prices increase on light volume. 
B) Prices decrease on light volume. 
C) Prices increase on heavy volume. 
D) Prices decrease on heavy volume. 
E) None of the above.

Question 2

Exhibit 15.2
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The table below provides five days of trade data. $$\begin{array}{l}
\begin{array} { c c c c c } &
\text { Issues }\
\text { Day } & \text { Traded } & \text { Advances } & \text { Declines } & \text { Unchanged } \
\hline 1 & 22456 & 15698 & 6158 & 600 \
2 & 23013 & 14560 & 8210 & 243 \
3 & 23124 & 10324 & 12678 & 122 \
4 & 22678 & 9867 & 11567 & 1244 \
5 & 21897 & 8678 & 12561 & 658
\end{array}
\end{array}$$
-Refer to Exhibit 15.2. 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 3

Technical analysts feel that financial accounting statements lack information, or report it in a way that makes comparisons difficult. Which of the following does not constitute a problem?

Accepted Answer

A) Detailed information concerning sales and expenses by product line. 
B) Statements of change in financial position. 
C) Alternative ways of reporting expenses. 
D) Alternative ways of reporting assets and liabilities. 
E) The availability of psychological and nonquantitative variables. 
A) Detailed information concerning sales and expenses by product line. 
B) Statements of change in financial position. 
C) Alternative ways of reporting expenses. 
D) Alternative ways of reporting assets and liabilities. 
E) The availability of psychological and nonquantitative variables.

Question 4

____ charts show time series of price while ____ charts only reflect change regardless of time.

Accepted Answer

A) Relative strength, bar 
B) Relative strength, advance/decline 
C) Point and bar, figure 
D) Bar, point and figure 
E) Bar, multiple indicator 
A) Relative strength, bar 
B) Relative strength, advance/decline 
C) Point and bar, figure 
D) Bar, point and figure 
E) Bar, multiple indicator

Question 5

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 6

If a technical trading rule is successful, more traders use it, causing the rule to become even more successful.

Accepted Answer

A) True 
 B)False

Question 7

In examining the properties of world market currencies or the spreads between currencies, an analyst is most likely to use time series properties to determine all the following, except

Accepted Answer

A) Volatility. 
B) Overbought condition. 
C) Resistance-support levels. 
D) Trend. 
E) An oversold condition. 
A) Volatility. 
B) Overbought condition. 
C) Resistance-support levels. 
D) Trend. 
E) An oversold condition.

Question 8

The confidence index published by Barron's is the ratio of the average yield on 10 top grade corporate bonds to the

Accepted Answer

A) Average yield on 30 blue chip corporate stocks. 
B) Average yield on 40 convertible corporate bonds. 
C) Yield on U.S. Treasury bills. 
D) Yield on the Dow Jones average of 40 bonds. 
E) Yield on the Shearson Lehman Hutton Corporate Bond Index 
A) Average yield on 30 blue chip corporate stocks. 
B) Average yield on 40 convertible corporate bonds. 
C) Yield on U.S. Treasury bills. 
D) Yield on the Dow Jones average of 40 bonds. 
E) Yield on the Shearson Lehman Hutton Corporate Bond Index

Question 9

A price range at which technicians feel that a significant increase in the price of the stock will be resisted is referred to as

Accepted Answer

A) Supply threshold. 
B) Support level. 
C) Short interest level. 
D) Advancement level. 
E) Resistance level. 
A) Supply threshold. 
B) Support level. 
C) Short interest level. 
D) Advancement level. 
E) Resistance level.

Question 10

If the aggregate market is rising, but the breadth index is declining, it is a bearish signal.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Most technicians feel that since price patterns repeat themselves, a single trading rule is sufficient.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Empirical analysis suggests that trigger points for trading rules are relatively stable over time.

Accepted Answer

A) True 
 B)False

Question 15

An increase in debit balances means more investing by naive investors and would be a bearish indicator.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not considered an assumption of technical analysis?

Accepted Answer

A) Market value is determined solely by supply and demand. 
B) Supply and demand are governed by both rational and irrational factors. 
C) Security prices tend to move in trends that persist for an appreciable length of time. 
D) Stock prices follow a random walk. 
E) Changes in trend are caused by the shifts in supply and demand relationships. 
A) Market value is determined solely by supply and demand. 
B) Supply and demand are governed by both rational and irrational factors. 
C) Security prices tend to move in trends that persist for an appreciable length of time. 
D) Stock prices follow a random walk. 
E) Changes in trend are caused by the shifts in supply and demand relationships.

Question 17

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 18

The T-Bill-Eurodollar yield spread widens during periods of international crisis.

Accepted Answer

A) True 
 B)False

Question 19

Contrary trading rules assert that investors tend to be wrong except at market peaks and troughs.

Accepted Answer

A) True 
 B)False

Question 20

The breadth of the market measures the daily volume for a particular market.

Accepted Answer

A) True 
 B)False

Exam 15: Technical Analysis

To a technician that believed in the importance of volume, a bullish signal would occur when

Technical analysts feel that financial accounting statements lack information, or report it in a way that makes comparisons difficult. Which of the following does not constitute a problem?

____ charts show time series of price while ____ charts only reflect change regardless of time.

A technical analyst might consider the following as a bearish signal

If a technical trading rule is successful, more traders use it, causing the rule to become even more successful.

In examining the properties of world market currencies or the spreads between currencies, an analyst is most likely to use time series properties to determine all the following, except

The confidence index published by Barron's is the ratio of the average yield on 10 top grade corporate bonds to the

A price range at which technicians feel that a significant increase in the price of the stock will be resisted is referred to as

If the aggregate market is rising, but the breadth index is declining, it is a bearish signal.

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

Most technicians feel that since price patterns repeat themselves, a single trading rule is sufficient.

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

Empirical analysis suggests that trigger points for trading rules are relatively stable over time.

An increase in debit balances means more investing by naive investors and would be a bearish indicator.

Which of the following is not considered an assumption of technical analysis?

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

The T-Bill-Eurodollar yield spread widens during periods of international crisis.

Contrary trading rules assert that investors tend to be wrong except at market peaks and troughs.

The breadth of the market measures the daily volume for a particular market.

The Investment Setting

The Asset Allocation Decision

Selecting Investments in a Global Market

Organization and Functioning of Securities Markets

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

Introduction to Security Valuation

Macroanalysis and Microvaluation of the Stock Market

Industry Analysis

Company Analysis and Stock Valuation

Equity Portfolio Management Strategies

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

Filters

charts show time series of price while charts only reflect change regardless of time.