Question 1

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 2

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 3

Which of the following statements is true?

Accepted Answer

A)  At a support level, the technician would expect an increase in the demand for a stock. 
B)  At a resistance level, the technician would expect an increase in the demand for a stock. 
C)  At a resistance level, the technician would expect any price increase to reverse abruptly. 
D)  Choices a and c 
E)  All of the above 
A)  At a support level, the technician would expect an increase in the demand for a stock. 
B)  At a resistance level, the technician would expect an increase in the demand for a stock. 
C)  At a resistance level, the technician would expect any price increase to reverse abruptly. 
D)  Choices a and c 
E)  All of the above

Question 4

The majority of technicians follows many trading rules and attempt to arrive at a consensus among their rules.

Accepted Answer

A) True 
 B)False

Question 5

The Dow theory contends that stock price movements are similar to the movement of tides,waves,and ripples.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The relative strength index for a stock is equal to the price of the stock

Accepted Answer

A)  Divided by the value of a stock-market index. 
B)  Multiplied by the value of a stock-market index. 
C)  Divided by the value of a group of industry stocks. 
D)  Multiplied by an industry peer group and divided by a market index. 
E)  Divided by the 30 day moving average of prior stock movements. 
A)  Divided by the value of a stock-market index. 
B)  Multiplied by the value of a stock-market index. 
C)  Divided by the value of a group of industry stocks. 
D)  Multiplied by an industry peer group and divided by a market index. 
E)  Divided by the 30 day moving average of prior stock movements.

Question 8

An advantage of technical analysis over fundamental analysis is technical analysis

Accepted Answer

A)  Has an increased amount of data that allows the analyst to process the information 
B)  Can more thoroughly investigate accounting information 
C)  Adjusts for differences in GAAP accounting procedures across the industry 
D)  Can capture non-quantifiable variables such as psychological factors 
E)  None of the above 
A)  Has an increased amount of data that allows the analyst to process the information 
B)  Can more thoroughly investigate accounting information 
C)  Adjusts for differences in GAAP accounting procedures across the industry 
D)  Can capture non-quantifiable variables such as psychological factors 
E)  None of the above

Question 9

Calculate the net advance-decline for day 5 using the trade data in the table below.
                                         $\text { Issues }$
$$\begin{array} { c c c c c } 
\text { Diy } & \text { Traded } & \text { Advances } & \text { Declines } & \text { Unchringed } \
\hline 1 & 32456 & 25698 & 6058 & 700 \
2 & 43013 & 24560 & 17210 & 1243 \
3 & 33124 & 20324 & 12378 & 422 \
4 & 32678 & 19867 & 11367 & 1444 \
5 & 31897 & 18678 & 12278 & 941
\end{array}$$

Accepted Answer

A)  -5,459 
B)  941 
C)  5,459 
D)  6,400 
E)  7,853 
A)  -5,459 
B)  941 
C)  5,459 
D)  6,400 
E)  7,853

Question 10

According to technical analysts using mutual fund cash positions to guide investment decisions

Accepted Answer

A)  A low cash ratio position is a bullish indicator. 
B)  A high cash position is a bullish indicator. 
C)  A high cash position is a bearish indicator. 
D)  A low cash position is neither bearish nor bullish. 
E)  None of the above. 
A)  A low cash ratio position is a bullish indicator. 
B)  A high cash position is a bullish indicator. 
C)  A high cash position is a bearish indicator. 
D)  A low cash position is neither bearish nor bullish. 
E)  None of the above.

Question 11

A resistance level differs from a support level in that

Accepted Answer

A)  at a resistance level most investors would hold stock until the price improves; at a support level a stock becomes overvalued and investor interest is likely to decrease. 
B)  at a resistance level the analyst would expect a substantial increase in the demand for a stock; at a support level the analyst would expect a substantial decrease in the demand for a stock. 
C)  at a resistance level most investors would sell a stock; at a support level most investors would be willing to purchase a stock. 
D)  Choices a and 
E)  None of the above. 
A)  at a resistance level most investors would hold stock until the price improves; at a support level a stock becomes overvalued and investor interest is likely to decrease. 
B)  at a resistance level the analyst would expect a substantial increase in the demand for a stock; at a support level the analyst would expect a substantial decrease in the demand for a stock. 
C)  at a resistance level most investors would sell a stock; at a support level most investors would be willing to purchase a stock. 
D)  Choices a and 
E)  None of the above.

Question 12

Technical analysts believe that security prices do not adjust rapidly.

Accepted Answer

A) True 
 B)False

Question 13

Technical analysis differs from fundamental analysis in that

Accepted Answer

A)  Technical analysts contend that in-depth assessments of basic aggregate market, industry, and company performance is necessary; past price movements indicate future price movements. 
B)  Technical analysts believe the market value of common stocks is determined by the interaction of supply and demand. 
C)  Technical analysts argue that the market constantly weighs rational and irrational factors and that both of these affect price. 
D)  Technical analysts depend far more heavily on objective, data-based approaches than the fundamentalists do. 
E)  Technical analysts hold that the price of a security is determined by an expected return risk. 
A)  Technical analysts contend that in-depth assessments of basic aggregate market, industry, and company performance is necessary; past price movements indicate future price movements. 
B)  Technical analysts believe the market value of common stocks is determined by the interaction of supply and demand. 
C)  Technical analysts argue that the market constantly weighs rational and irrational factors and that both of these affect price. 
D)  Technical analysts depend far more heavily on objective, data-based approaches than the fundamentalists do. 
E)  Technical analysts hold that the price of a security is determined by an expected return risk.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

____ 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 16

Fundamentalists contend that past price movements will indicate future price movements.

Accepted Answer

A) True 
 B)False

Question 17

The Dow Theory describes stock prices as moving in trends analogous to the movement of water.Which of the following statements is not true?

Accepted Answer

A)  Major trends resemble tides. 
B)  Intermediate trends resemble waves. 
C)  Short-run movements are like ripples. 
D)  Waves are the most important. 
E)  None of the above (that is, all are true statements) 
A)  Major trends resemble tides. 
B)  Intermediate trends resemble waves. 
C)  Short-run movements are like ripples. 
D)  Waves are the most important. 
E)  None of the above (that is, all are true statements)

Question 18

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 19

When the 50-day moving average crosses the 200-day moving average from below on good volume

Accepted Answer

A)  This would be a bearish indicator because it signals a change to a negative trend. 
B)  This would be a bullish indicator because it signals a change to a negative trend. 
C)  This would be a bullish indicator because it signals a change to a positive trend. 
D)  This would be a bearish indicator because it signals a change to a positive trend. 
E)  None of the above. 
A)  This would be a bearish indicator because it signals a change to a negative trend. 
B)  This would be a bullish indicator because it signals a change to a negative trend. 
C)  This would be a bullish indicator because it signals a change to a positive trend. 
D)  This would be a bearish indicator because it signals a change to a positive trend. 
E)  None of the above.

Question 20

For technical trading rules to consistently generate superior returns,the market would have to be inefficient.

Accepted Answer

A) True 
 B)False

Exam 16: Technical Analysis

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

Which of the following statements is true?

The majority of technicians follows many trading rules and attempt to arrive at a consensus among their rules.

The Dow theory contends that stock price movements are similar to the movement of tides,waves,and ripples.

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

The relative strength index for a stock is equal to the price of the stock

An advantage of technical analysis over fundamental analysis is technical analysis

Calculate the net advance-decline for day 5 using the trade data in the table below. Issues \text { Issues } Issues Diy Traded Advances Declines Unchringed 1 32456 25698 6058 700 2 43013 24560 17210 1243 3 33124 20324 12378 422 4 32678 19867 11367 1444 5 31897 18678 12278 941

According to technical analysts using mutual fund cash positions to guide investment decisions

A resistance level differs from a support level in that

Technical analysts believe that security prices do not adjust rapidly.

Technical analysis differs from fundamental analysis in that

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

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

Fundamentalists contend that past price movements will indicate future price movements.

The Dow Theory describes stock prices as moving in trends analogous to the movement of water.Which of the following statements is not true?

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

When the 50-day moving average crosses the 200-day moving average from below on good volume

For technical trading rules to consistently generate superior returns,the market would have to be inefficient.

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

Filters

Calculate the net advance-decline for day 5 using the trade data in the table below. $\text { Issues }$ Diy Traded Advances Declines Unchringed 1 32456 25698 6058 700 2 43013 24560 17210 1243 3 33124 20324 12378 422 4 32678 19867 11367 1444 5 31897 18678 12278 941

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