Question 1

Which of the following is a characteristic of the short interest ratio: It is:

Accepted Answer

A) calculated daily as well as weekly. 
B) often interpreted without any additional information. 
C) between 2 and 3 in recent times. 
D) considered to be a measure of investor sentiment. 
A) calculated daily as well as weekly. 
B) often interpreted without any additional information. 
C) between 2 and 3 in recent times. 
D) considered to be a measure of investor sentiment. 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. 
A) Arbitrage. 
B) Trading Rules. 
C) Short-interest. 
D) Behavioral. D

Question 3

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. C

Question 4

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 5

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

Question 6

Technical analysis differs from fundamental analysis in that technical analysis:

Accepted Answer

A) is aimed at the market while fundamental analysis is aimed at individual stocks. 
B) is based on published market data and focuses on internal factors. 
C) focuses on the long-term trends of production. 
D) does not consider price and volume. 
A) is aimed at the market while fundamental analysis is aimed at individual stocks. 
B) is based on published market data and focuses on internal factors. 
C) focuses on the long-term trends of production. 
D) does not consider price and volume.

Question 7

A filter rule specifies a breakpoint for a stock or average and trades are made when the price is greater than the filter.

Accepted Answer

A) True 
 B)False

Question 8

Secondary movements are often termed technical corrections.

Accepted Answer

A) True 
 B)False

Question 9

What is usually shown at the bottom of a bar chart?

Accepted Answer

A) a point and figure chart 
B) advance/decline line 
C) closing price 
D) volume 
A) a point and figure chart 
B) advance/decline line 
C) closing price 
D) volume

Question 10

A high short interest ratio is generally interpreted as:

Accepted Answer

A) a bullish signal. 
B) evidence of a downside breakout. 
C) a bearish signal. 
D) evidence of the presence of odd-lot individual investors. 
A) a bullish signal. 
B) evidence of a downside breakout. 
C) a bearish signal. 
D) evidence of the presence of odd-lot individual investors.

Question 11

The cash position of mutual funds is a contrarian indicator.

Accepted Answer

A) True 
 B)False

Question 12

Technical analysis focuses on timing and on the short run.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

Risk,transactions co

Question 14

How is relative strength calculated and used?

Accepted Answer

The relative strength of a stock is a ra

Question 15

Which of the following is not one of the tests of a technical trading rule?

Accepted Answer

A) Transaction and other costs 
B) Consistency 
C) Return 
D) Risk 
A) Transaction and other costs 
B) Consistency 
C) Return 
D) Risk

Question 16

If a trend exhibits support and resistance levels simultaneously that appear well defined,the trendlines are referred to as channel lines.

Accepted Answer

A) True 
 B)False

Question 17

Explain three specific buy signals using a moving average.

Accepted Answer

(a)The price is above the moving average

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

Investors who sell short expect to make money when the stock price goes down.How,then,can a high short-interest ratio be considered bullish?

Accepted Answer

Short sales must be

Exam 16: Technical Analysis

Which of the following is a characteristic of the short interest ratio: It is:

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

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

One of the primary tools of a technical analyst is:

Technical analysis differs from fundamental analysis in that technical analysis:

A filter rule specifies a breakpoint for a stock or average and trades are made when the price is greater than the filter.

Secondary movements are often termed technical corrections.

What is usually shown at the bottom of a bar chart?

A high short interest ratio is generally interpreted as:

The cash position of mutual funds is a contrarian indicator.

Technical analysis focuses on timing and on the short run.

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

How is relative strength calculated and used?

Which of the following is not one of the tests of a technical trading rule?

If a trend exhibits support and resistance levels simultaneously that appear well defined,the trendlines are referred to as channel lines.

Explain three specific buy signals using a moving average.

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

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

Investors who sell short expect to make money when the stock price goes down.How,then,can a high short-interest ratio be considered bullish?

Understanding Investments

Investment Alternatives

Indirect Investing

Securities Markets and Market Indexes

How Securities Are Traded

The Risks and Returns From Investing

Portfolio Theory

Portfolio Selection

Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis

Market Efficiency

Economy Market Analysis

Industry Analysis

Company Analysis

Bond Yields

Bonds: Analysis and Strategy

Options

Futures

Portfolio Management

Evaluation of Investment

Filters