Question 1

A high put/call ratio indicates a pervasive bearish attitude by sophisticated investors so it is a bearish indicator.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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. 
E)  None of the above. 
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. 
E)  None of the above.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A support level is the price range at which the technician would expect an increase in the supply of stock and a price reversal.

Accepted Answer

A) True 
 B)False

Question 6

Exhibit 10-2
THE FOLLOWING INFORMATION IS TO BE USED TO ANSWER THE NEXT QUESTION(S)
The table below provides five days of trade data. $$\begin{array} { c c c c c } 
& \text { Issues } & & & \
\hline \text { Day } & \text { Traded } & \text { Advances } & \text { Declines } & \text { Unchanged } \
 1 & 22456 & 15698 & 6158 & 600 \
2 & 23013 & 14560 & 8210 & 243 \
3 & 23124 & 10324 & 12676 & 122 \
4 & 22678 & 9867 & 11567 & 1244 \
5 & 21897 & 8678 & 12561 & 658
\end{array}$$
-Refer to Exhibit 10-2. 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 7

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

Question 8

A resistance level is the price range at which the technician would expect an increase in the demand of stock and a price reversal.

Accepted Answer

A) True 
 B)False

Question 9

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 10

A divergence between an increase in a stock market series and the rest of the stock market can be detected using

Accepted Answer

A)  Debit balances in brokerage accounts 
B)  Short interest 
C)  The advance-decline line 
D)  Confidence index 
E)  None of the above. 
A)  Debit balances in brokerage accounts 
B)  Short interest 
C)  The advance-decline line 
D)  Confidence index 
E)  None of the above.

Question 11

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 Treasury bills. 
D)  Yield on intermediate-grade bonds. 
E)  Yield on the Scotia Capital Bond Universe Index 
A)  Average yield on 30 blue chip corporate stocks. 
B)  Average yield on 40 convertible corporate bonds. 
C)  Yield on Treasury bills. 
D)  Yield on intermediate-grade bonds. 
E)  Yield on the Scotia Capital Bond Universe Index

Question 12

One of the potential disadvantages of technical analysis is that it can lead to investing too early, even before fundamental analysts do.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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 15

The ratio of the price of a stock or an industry group to the value of the market index is called the

Accepted Answer

A)  Company to market ratio. 
B)  Composite stock ratio. 
C)  Relational proportion ratio. 
D)  Stock to market ratio. 
E)  Relative strength ratio. 
A)  Company to market ratio. 
B)  Composite stock ratio. 
C)  Relational proportion ratio. 
D)  Stock to market ratio. 
E)  Relative strength ratio.

Question 16

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 b 
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 b 
E)  None of the above.

Question 17

When the 50-day moving average crosses the 200-day moving average from ____ on ____ volume, this would be a ____ signal.

Accepted Answer

A)  Above, low, bullish. 
B)  below, high, bearish. 
C)  below, low, bullish. 
D)  above, high, bullish. 
E)  below, high, bullish. 
A)  Above, low, bullish. 
B)  below, high, bearish. 
C)  below, low, bullish. 
D)  above, high, bullish. 
E)  below, high, bullish.

A high put/call ratio indicates a pervasive bearish attitude by sophisticated investors so it is a bearish indicator.

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

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

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

A support level is the price range at which the technician would expect an increase in the supply of stock and a price reversal.

Which of the following statements is true?

A resistance level is the price range at which the technician would expect an increase in the demand of stock and a price reversal.

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

A divergence between an increase in a stock market series and the rest of the stock market can be detected using

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

One of the potential disadvantages of technical analysis is that it can lead to investing too early, even before fundamental analysts do.

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

Technical analysis differs from fundamental analysis in that

The ratio of the price of a stock or an industry group to the value of the market index is called the

A resistance level differs from a support level in that

When the 50-day moving average crosses the 200-day moving average from on volume, this would be a signal.

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

Exam 10: Technical Analysis

A high put/call ratio indicates a pervasive bearish attitude by sophisticated investors so it is a bearish indicator.

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

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

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

A support level is the price range at which the technician would expect an increase in the supply of stock and a price reversal.

Which of the following statements is true?

A resistance level is the price range at which the technician would expect an increase in the demand of stock and a price reversal.

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

A divergence between an increase in a stock market series and the rest of the stock market can be detected using

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

One of the potential disadvantages of technical analysis is that it can lead to investing too early, even before fundamental analysts do.

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

Technical analysis differs from fundamental analysis in that

The ratio of the price of a stock or an industry group to the value of the market index is called the

A resistance level differs from a support level in that

When the 50-day moving average crosses the 200-day moving average from ____ on ____ volume, this would be a ____ signal.

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

When the 50-day moving average crosses the 200-day moving average from on volume, this would be a signal.