Question 1

The short interest ratio is the ratio between the number of shares sold short and not covered, and the

Accepted Answer

A)  Average number of stocks reaching new highs. 
B)  Average daily number of stocks that increased in value. 
C)  Average daily volume of trading on the exchange. 
D)  Average monthly volume of trading on the exchange. 
E)  Average number of shares outstanding in those stocks. 
A)  Average number of stocks reaching new highs. 
B)  Average daily number of stocks that increased in value. 
C)  Average daily volume of trading on the exchange. 
D)  Average monthly volume of trading on the exchange. 
E)  Average number of shares outstanding in those stocks. C

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

Technical analysts believe that security prices do not adjust rapidly.

Accepted Answer

A) True 
 B)False  True

Question 4

What is the price range at which technicians would expect a substantial increase in the demand for a stock called?

Accepted Answer

A)  Demand threshold. 
B)  Resistance level. 
C)  Support level. 
D)  Resistance limit. 
E)  Technical restraint. 
A)  Demand threshold. 
B)  Resistance level. 
C)  Support level. 
D)  Resistance limit. 
E)  Technical restraint.

Question 5

A narrowing of the T-bill-Eurodollar and __________ signal, because ___________.

Accepted Answer

A)  Bearish, it signals falling investor confidence 
B)  Bullish, it signal rising investor confidence 
C)  Bearish, it signals a flight to quality 
D)  Bullish, it signals a flight to quality 
E)  None of the above. 
A)  Bearish, it signals falling investor confidence 
B)  Bullish, it signal rising investor confidence 
C)  Bearish, it signals a flight to quality 
D)  Bullish, it signals a flight to quality 
E)  None of the above.

Question 6

Exhibit 10-1
THE FOLLOWING INFORMATION IS TO BE USED TO ANSWER THE NEXT QUESTION(S)
Daily closings for the S&P/TSX composite Index are given in the table below. $$\begin{array} { c c } 
\text { Day } & \text { Price } \
\hline 1 & 9867 \
2 & 10025 \
3 & 10524 \
4 & 10210 \
5 & 10104 \
6 & 9925
\end{array}$$
-Refer to Exhibit 10-1. Calculate a 5-day moving average for day 6.

Accepted Answer

A)  10,102.3 
B)  9905.6 
C)  9875.4 
D)  10,215.7 
E)  10,157.6 
A)  10,102.3 
B)  9905.6 
C)  9875.4 
D)  10,215.7 
E)  10,157.6

Question 7

If the 50-day moving average line crosses the 200-day moving average line from below on good volume, this would be a bullish signal.

Accepted Answer

A) True 
 B)False

Question 8

Based on the daily closings for the S&P/TSX Composite Index given in the table below, calculate a four-day moving average for Day 4. $$\begin{array} { c c } 
\text { Day } & \text { Price } \
\hline 1 & 10500 \
2 & 10025 \
3 & 10125 \
4 & 10210
\end{array}$$

Accepted Answer

A)  10,500 
B)  10,210 
C)  10,215 
D)  10,000 
E)  11,000 
A)  10,500 
B)  10,210 
C)  10,215 
D)  10,000 
E)  11,000

Question 9

What is the cumulative number of shares that have been sold short by investors and not covered called?

Accepted Answer

A)  Margin interest. 
B)  Short interest. 
C)  Short ratio. 
D)  Short/long ratio. 
E)  Naked short ratio. 
A)  Margin interest. 
B)  Short interest. 
C)  Short ratio. 
D)  Short/long ratio. 
E)  Naked short ratio.

Question 10

To 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 11

The confidence index increases as the yield on lower grade bonds decreases, everything else being constant.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

According to contrary opinion technicians, the ratio of mutual funds cash to total assets ____ near troughs in the market cycle and ____ near peaks.

Accepted Answer

A)  Level out, spikes 
B)  Remains low, remains high 
C)  Is published near, is not published 
D)  Increases, decreases 
E)  Decreases, increases 
A)  Level out, spikes 
B)  Remains low, remains high 
C)  Is published near, is not published 
D)  Increases, decreases 
E)  Decreases, increases

Question 15

Exhibit 10-1
THE FOLLOWING INFORMATION IS TO BE USED TO ANSWER THE NEXT QUESTION(S)
Daily closings for the S&P/TSX composite Index are given in the table below. $$\begin{array} { c c } 
\text { Day } & \text { Price } \
\hline 1 & 9867 \
2 & 10025 \
3 & 10524 \
4 & 10210 \
5 & 10104 \
6 & 9925
\end{array}$$
-Refer to Exhibit 10-1. Calculate a 4-day moving average for day 5.

Accepted Answer

A)  10,102.3 
B)  9905.6 
C)  9875.4 
D)  10,215.7 
E)  10,157.6 
A)  10,102.3 
B)  9905.6 
C)  9875.4 
D)  10,215.7 
E)  10,157.6

Question 16

A technical analyst might use mutual fund cash positions as follows

Accepted Answer

A)  Sell stock when cash levels are low 
B)  Buy stock when cash levels are low 
C)  Sell stock when cash levels are high 
D)  Buy stock when cash levels are high 
E)  Choices c and d. 
A)  Sell stock when cash levels are low 
B)  Buy stock when cash levels are low 
C)  Sell stock when cash levels are high 
D)  Buy stock when cash levels are high 
E)  Choices c and d.

Question 17

What are the indicators that tell what smart investors are doing?

Accepted Answer

A)  The put/call ratio. 
B)  Mutual fund cash position. 
C)  The Dow theory. 
D)  Short sales by specialists. 
E)  Head and tail indicator. 
A)  The put/call ratio. 
B)  Mutual fund cash position. 
C)  The Dow theory. 
D)  Short sales by specialists. 
E)  Head and tail indicator.

Question 18

What might a technical analyst consider as a bearish signal(s)?

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)  Choices 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)  Choices b and d

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

For technical trading rules to generate returns that are superior to a buy-and-hold strategy, net of transaction costs, the market would have to be

Accepted Answer

A)  Rising. 
B)  Falling. 
C)  Inefficient. 
D)  Overvalued. 
E)  Undervalued. 
A)  Rising. 
B)  Falling. 
C)  Inefficient. 
D)  Overvalued. 
E)  Undervalued.

Exam 10: Technical Analysis

The short interest ratio is the ratio between the number of shares sold short and not covered, and the

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

Technical analysts believe that security prices do not adjust rapidly.

What is the price range at which technicians would expect a substantial increase in the demand for a stock called?

A narrowing of the T-bill-Eurodollar and __________ signal, because ___________.

Exhibit 10-1 THE FOLLOWING INFORMATION IS TO BE USED TO ANSWER THE NEXT QUESTION(S) Daily closings for the S&P/TSX composite Index are given in the table below. Day Price 1 9867 2 10025 3 10524 4 10210 5 10104 6 9925 -Refer to Exhibit 10-1. Calculate a 5-day moving average for day 6.

If the 50-day moving average line crosses the 200-day moving average line from below on good volume, this would be a bullish signal.

Based on the daily closings for the S&P/TSX Composite Index given in the table below, calculate a four-day moving average for Day 4. Day Price 1 10500 2 10025 3 10125 4 10210

What is the cumulative number of shares that have been sold short by investors and not covered called?

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

The confidence index increases as the yield on lower grade bonds decreases, everything else being constant.

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

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

According to contrary opinion technicians, the ratio of mutual funds cash to total assets ____ near troughs in the market cycle and ____ near peaks.

Exhibit 10-1 THE FOLLOWING INFORMATION IS TO BE USED TO ANSWER THE NEXT QUESTION(S) Daily closings for the S&P/TSX composite Index are given in the table below. Day Price 1 9867 2 10025 3 10524 4 10210 5 10104 6 9925 -Refer to Exhibit 10-1. Calculate a 4-day moving average for day 5.

A technical analyst might use mutual fund cash positions as follows

What are the indicators that tell what smart investors are doing?

What might a technical analyst consider as a bearish signal(s)?

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

For technical trading rules to generate returns that are superior to a buy-and-hold strategy, net of transaction costs, the market would have to be

The Investment Setting

The Asset Allocation Decision

Selecting Investments in a Global Market

Securities Markets and the Economy

Efficient Capital Markets

An Introduction to Portfolio Management

Asset Pricing Models: Capm and Apt

Economic and Industry Analysis

Company Analysis and Stock Valuation

Bond Fundamentals

The Analysis and Valuation of Bonds

An Introduction to Derivative Markets and Securities

Derivatives: Analysis and Valuation

Equity Portfolio Management Strategies

Bond Portfolio Management Strategies

Professional Money Management, Alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Analysis of Financial Statements

An Introduction to Security Valuation

Web Appendix: A Review of Statistics and the Security Market Line

Web Appendix: A Review of Statistics and the Security Market Line

Appendix: Objectives and Constraints of Institutional Investors

Filters

A narrowing of the T-bill-Eurodollar and signal, because _.

According to contrary opinion technicians, the ratio of mutual funds cash to total assets near troughs in the market cycle and near peaks.