Question 1

Historical tests of filter rules indicate that:

Accepted Answer

A) several filters were profitable before commissions,but not after. 
B) several filters were profitable before and after commissions. 
C) no filters were profitable even before commissions. 
D) all filters were profitable before commissions,but not after. 
A) several filters were profitable before commissions,but not after. 
B) several filters were profitable before and after commissions. 
C) no filters were profitable even before commissions. 
D) all filters were profitable before commissions,but not after.

Question 2

The short interest ratio is found by dividing the number of shares sold short by the average:

Accepted Answer

A) number of shares outstanding in the market. 
B) daily volume of trading on the exchange. 
C) number of stocks reaching new lows. 
D) daily number of stocks bought long. 
A) number of shares outstanding in the market. 
B) daily volume of trading on the exchange. 
C) number of stocks reaching new lows. 
D) daily number of stocks bought long.

Question 3

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) The number of stocks hitting all-time highs is low 
A) The short-interest ratio is low 
B) The bearish sentiment index is around 20 percent 
C) Mutual fund liquidity is low 
D) The number of stocks hitting all-time highs is low

Question 4

Which of the following is not one of the factors to consider in performing a valid test of a technical trading rule?

Accepted Answer

A) The transaction and other costs incurred by the rule. 
B) The consistency of performance from the rule. 
C) The holding period implied by the rule. 
D) The risk inherent in the rule. 
A) The transaction and other costs incurred by the rule. 
B) The consistency of performance from the rule. 
C) The holding period implied by the rule. 
D) The risk inherent in the rule.

Question 5

Institutional investors are often considered to have the "smart money," while small,individual investors are not so well informed about the market.Which two sentiment indicators treat both institutions and individuals alike?

Accepted Answer

The odd-lot theory asserts that one shou

Question 6

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. 
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.

Question 7

A bar chart is the simplest type of chart used in technical analysis.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is generally viewed as a bearish indicator for a stock?

Accepted Answer

A) It has a relatively high short-interest ratio. 
B) Its 50-day moving average price has penetrated the 200-day average from above. 
C) Following a price drop,the price penetrates the moving average from below. 
D) It has an increasing relative strength ratio. 
A) It has a relatively high short-interest ratio. 
B) Its 50-day moving average price has penetrated the 200-day average from above. 
C) Following a price drop,the price penetrates the moving average from below. 
D) It has an increasing relative strength ratio.

Question 9

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

Accepted Answer

Risk,transactions co

Question 10

Secondary movements are often termed technical corrections.

Accepted Answer

A) True 
 B)False

Question 11

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. 
A) 200-day moving average. 
B) 50-day moving average. 
C) the put-call ratio. 
D) the advance-decline line.

Question 12

One rule of thumb is that a stock is attractive when its relative strength has improved for at least:

Accepted Answer

A) 1 month. 
B) 2 months. 
C) 3 months. 
D) 4 months. 
A) 1 month. 
B) 2 months. 
C) 3 months. 
D) 4 months.

Question 13

Technicians that utilize the CBOE put/call ratio generally believe:

Accepted Answer

A) option investors tend to be losers. 
B) option investors tend to be winners. 
C) option investors are true technicians. 
D) option investors possess inside information. 
A) option investors tend to be losers. 
B) option investors tend to be winners. 
C) option investors are true technicians. 
D) option investors possess inside information.

Question 14

Conclusions about technical analysis suggest that:

Accepted Answer

A) it is difficult to justify technical analysis. 
B) it has been found to be completely deficient. 
C) stock price movements repeat themselves constantly. 
D) there is complete agreement about the interpretation of technical signals. 
A) it is difficult to justify technical analysis. 
B) it has been found to be completely deficient. 
C) stock price movements repeat themselves constantly. 
D) there is complete agreement about the interpretation of technical signals.

Question 15

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

Accepted Answer

By recording only "significant

Question 16

One of the primary tools of a technical analyst is:

Accepted Answer

A) sell-side research. 
B) buy-side research. 
C) Value Line earnings estimates. 
D) charts of stock price and volume. 
A) sell-side research. 
B) buy-side research. 
C) Value Line earnings estimates. 
D) charts of stock price and volume.

Question 17

A daily accumulation of stocks advancing or declining is used in:

Accepted Answer

A) volume of trading analysis. 
B) relative strength analysis. 
C) breadth of market analysis. 
D) short interest analysis. 
A) volume of trading analysis. 
B) relative strength analysis. 
C) breadth of market analysis. 
D) short interest analysis.

Question 18

Technical analysis is sometimes called market or:

Accepted Answer

A) external analysis. 
B) internal analysis. 
C) stochastic analysis. 
D) qualitative analysis. 
A) external analysis. 
B) internal analysis. 
C) stochastic analysis. 
D) qualitative analysis.

Question 19

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

Accepted Answer

The net advance for a day is the number

Question 20

In order to have confirmation of a major market trend under the Dow Theory,the:

Accepted Answer

A) industrial and utility averages must confirm each other. 
B) transportation and utility averages must confirm each other. 
C) utility average must lead the transportation average. 
D) transportation and industrial average must confirm each other. 
A) industrial and utility averages must confirm each other. 
B) transportation and utility averages must confirm each other. 
C) utility average must lead the transportation average. 
D) transportation and industrial average must confirm each other.

Exam 16: Technical Analysis

Historical tests of filter rules indicate that:

The short interest ratio is found by dividing the number of shares sold short by the average:

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

Which of the following is not one of the factors to consider in performing a valid test of a technical trading rule?

Institutional investors are often considered to have the "smart money," while small,individual investors are not so well informed about the market.Which two sentiment indicators treat both institutions and individuals alike?

A support level is a price range:

A bar chart is the simplest type of chart used in technical analysis.

Which of the following is generally viewed as a bearish indicator for a stock?

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

Secondary movements are often termed technical corrections.

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

One rule of thumb is that a stock is attractive when its relative strength has improved for at least:

Technicians that utilize the CBOE put/call ratio generally believe:

Conclusions about technical analysis suggest that:

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

One of the primary tools of a technical analyst is:

A daily accumulation of stocks advancing or declining is used in:

Technical analysis is sometimes called market or:

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

In order to have confirmation of a major market trend under the Dow Theory,the:

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