54) On a particular day, there were 920 stocks that advanced on the NYSE and 723 that declined.
The volume in advancing issues was 80,846,000, and the volume in declining issues was
70,397,000. The trin ratio is ________, and technical analysts are likely to be ________.
A) .90; bullish
B) .90; bearish
C) 1.11; bullish
D) 1.11; bearish
55) A point and figure chart:
I. Gives a sell signal when the stock price penetrates previous lows
II. Tracks significant upward or downward movements
III. Has no time dimension
IV. Indicates congestion areas
A) I and II only
B) II and III only
C) I, III, and IV only
D) I, II, III, and IV
56) When technical analysts say a stock has good “relative strength,” they mean that in the recent
past ________.
A) it has performed well compared to its closest competitors
B) it has exceeded its own historical high
C) trading volume in the stock has exceeded the normal trading volume
D) it has outperformed the market index
57) Technical traders view mutual fund investors as ________ market timers.
A) excellent
B) frequent
C) neutral
D) poor
58) An important assumption underlying the use of technical analysis techniques is that
________.
A) security prices adjust rapidly to new information
B) security prices adjust gradually to new information
C) security dealers will provide enough liquidity to keep price changes relatively small
D) all investors have immediate and costless access to information
59) If the put/call ratio increases, market contrarians may interpret this as what kind of signal?
A) buy signal
B) sell signal
C) hold signal
D) this is not interpreted as a signal
60) The tendency of investors to hold on to losing investments is called the ________.
A) overweighting effect
B) head-in-the-sand effect
C) disposition effect
D) prospector effect
61) Which one of the following best describes fundamental risk?
A) A stock is overpriced, but your fund does not allow you to engage in short sales.
B) Your models indicate a stock is mispriced, but you are not sure if this is a real profit
opportunity or a model input error.
C) You buy a stock that you believe is underpriced, and the underpricing persists for a long time,
hurting your short-term results.
D) A stock is trading in two different markets at two different prices.
62)
Day
1
2
3
4
Advances
870
760
960
840
Declines
880
990
790
910
Volume advancing(m)
580
620
480
510
Volume declining(m)
670
580
720
520
Yield on top-rated corporate bonds
6.8
%
6.7
%
6.7
%
6.6
%
Yield on intermediate-grade corporate bonds
7.4
%
7.4
%
7.5
%
7.6
%
The TRIN on day 2 is ________.
A) .72
B) 1.04
C) .92
D) .55
63)
Day
1
2
3
4
Advances
870
760
960
840
Declines
880
990
790
910
Volume advancing(m)
580
620
480
510
Volume declining(m)
670
580
720
520
Yield on top-rated corporate bonds
6.8
%
6.7
%
6.7
%
6.6
%
Yield on intermediate-grade corporate bonds
7.4
%
7.4
%
7.5
%
7.6
%
The confidence index on day 1 is ________.
A) .82
B) .89
C) .92
D) 1.09
64)
Day
1
2
3
4
Advances
870
760
960
840
Declines
880
990
790
910
Volume advancing(m)
580
620
480
510
Volume declining(m)
670
580
720
520
Yield on top-rated corporate bonds
6.8
%
6.7
%
6.7
%
6.6
%
Yield on intermediate-grade corporate bonds
7.4
%
7.4
%
7.5
%
7.6
%
The breadth on day 3 is ________.
A) -70
B) 10
C) 90
D) 170
65)
Day
1
2
3
4
Advances
870
760
960
840
Declines
880
990
790
910
Volume advancing(m)
580
620
480
510
Volume declining(m)
670
580
720
520
Yield on top-rated corporate bonds
6.8
%
6.7
%
6.7
%
6.6
%
Yield on intermediate-grade corporate bonds
7.4
%
7.4
%
7.5
%
7.6
%
The cumulative breadth for the first 2 days is ________.
A) -240
B) -50
C) 110
D) 250
66)
Day
1
2
3
4
Advances
870
760
960
840
Declines
880
990
790
910
Volume advancing(m)
580
620
480
510
Volume declining(m)
670
580
720
520
Yield on top-rated corporate bonds
6.8
%
6.7
%
6.7
%
6.6
%
Yield on intermediate-grade corporate bonds
7.4
%
7.4
%
7.5
%
7.6
%
Cumulative breadth for the 4 days is ________, which is ________.
A) -140; bullish
B) -140; bearish
C) -300; bullish
D) -300; bearish
67)
Day
1
2
3
4
Advances
870
760
960
840
Declines
880
990
790
910
Volume advancing(m)
580
620
480
510
Volume declining(m)
670
580
720
520
Yield on top-rated corporate bonds
6.8
%
6.7
%
6.7
%
6.6
%
Yield on intermediate-grade corporate bonds
7.4
%
7.4
%
7.5
%
7.6
%
From day 1 to day 4, the TRIN has ________ and is ________.
A) increased; bullish
B) increased; bearish
C) decreased; bullish
D) decreased; bearish
68)
Day
1
2
3
4
Advances
870
760
960
840
Declines
880
990
790
910
Volume advancing(m)
580
620
480
510
Volume declining(m)
670
580
720
520
Yield on top-rated corporate bonds
6.8
%
6.7
%
6.7
%
6.6
%
Yield on intermediate-grade corporate bonds
7.4
%
7.4
%
7.5
%
7.6
%
From day 1 to day 4, the confidence index has ________. This is ________.
A) increased; bullish
B) decreased; bullish
C) increased; bearish
D) decreased; bearish
69) Problems with behavioral finance include:
I. The behavioralists tell us nothing about how to exploit any irrationality.
II. The implications of behavioral patterns are inconsistent from case to case, sometimes
suggesting overreaction, sometimes underreaction.
III. As with technical trading rules, behavioralists can always find some pattern in past data that
supports a behavioralist trait.
A) I only
B) II only
C) I and III only
D) I, II, and III
70) A major problem with technical trading strategies is that ________.
A) it is very difficult to identify a true trend before the fact
B) it is very difficult to identify the correct trend after the fact
C) it is so easy to identify trends that all investors quickly do so
D) Kondratieff showed that you can’t identify trends without 48 to 60 years of data
71) The Elliott wave theory gives a buy signal when you can identify a primary bull trend by
identifying ________.
A) when the long-term direction of the market is positive
B) when the long-term direction of the market is negative
C) when the long-term direction of the market is stable
D) good stocks without regard to the long-term direction of the market