Question 1

Technical traders view mutual fund investors as ________ market timers.

Accepted Answer

A)   excellent
B)   frequent
C)   neutral
D)   poorE) C) and D)
F) All of the above

Question 2

On a particular day, there were 890 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 common measure of market breadth is ________.

Accepted Answer

A)   -10,449,000
B)   -167
C)   167
D)   10,449,000E) A) and D)
F) B) and C)

Question 3

Following a period of falling prices, the moving average will ________.

Accepted Answer

A)   be below the current price
B)   be above the current price
C)   be equal to the current price
D)   become more volatile than it had been before prices fellE) B) and C)
F) B) and D)

Question 4

Relative strength is ________ indicator.

Accepted Answer

A)   a fundamental
B)   an economic
C)   a technical
D)   an internationalE) All of the above
F) A) and B)

Question 5

The Elliott wave theory gives a buy signal when you can identify a primary bull trend by identifying ________.

Accepted Answer

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 marketE) A) and B)
F) B) and C)

Question 6

According to market technicians, it is time to sell stock in a head-and-shoulders formation when ________.

Accepted Answer

A)   the price index pierces the left shoulder
B)   the price index pierces the right shoulder
C)   the price index pierces the head
D)   none of these options takes placeE) All of the above
F) B) and D)

Question 7

The cumulative tally of the number of advancing stocks minus declining stocks is called the ________.

Accepted Answer

A)   market breadth
B)   market volume
C)   trin ratio
D)   relative strength ratioE) All of the above
F) C) and D)

Question 8

The TRIN on day 2 is ________.

Accepted Answer

A)   .72
B)   1.04
C)  .92
D)   .55E) A) and C)
F) A) and B)

Question 9

If investors are too slow to update their beliefs about a stock's future performance when new evidence arises, they are exhibiting ________.

Accepted Answer

A)   representativeness bias
B)   framing error
C)   conservatism
D)   memory biasE) None of the above
F) B) and C)

Question 10

Contrarian investors consider a high put/call ratio a ________.

Accepted Answer

A)   bearish signal
B)   bullish signal
C)   trend confirmation signal
D)   signal to enter the options marketE) A) and D)
F) None of the above

Question 11

Even though indexing is growing in popularity, only about ________ of equity in the mutual fund industry is held in indexed funds. This may be a sign that investors and managers ________.

Accepted Answer

A)   5%; are excessively conservative
B)   25%; overestimate their ability
C)   15%; suffer from framing biases
D)   25%; engage in mental accountingE) C) and D)
F) A) and B)

Question 12

Cumulative breadth for the 4 days is ________, which is ________.

Accepted Answer

A)   -140; bullish
B)   -140; bearish
C)   -300; bullish
D)   -300; bearishE) A) and D)
F) All of the above

Question 13

You find that the confidence index is down, the market breadth is up, and the trin ratio is down. In total, how many bullish signs do you have?

Accepted Answer

A)   0
B)   1
C)   2
D)   3E) A) and C)
F) C) and D)

Question 14

From day 1 to day 4, the TRIN has ________ and is ________.

Accepted Answer

A)   increased; bullish
B)   increased; bearish
C)   decreased; bullish
D)   decreased; bearishE) A) and B)
F) B) and C)

Question 15

A major problem with technical trading strategies is that ________.

Accepted Answer

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 dataE) B) and D)
F) B) and C)

Question 16

The cumulative breadth for the first 2 days is ________.

Accepted Answer

A)   -240
B)   -50
C)   110
D)   250E) A) and B)
F) A) and C)

Question 17

If investors overweight recent performance in forecasting the future, they are exhibiting ________.

Accepted Answer

A)   representativeness bias
B)   framing error
C)   memory bias
D)   overconfidenceE) A) and B)
F) All of the above

Question 18

An investor purchases shares of an index fund. The investor could take on the same level of risk by taking out a loan and purchasing a higher-risk specialty fund. The Sharpe ratio on this complete portfolio is higher than her existing investment. What behavioral concept prevents the investor from taking out the loan and investing in the index fund?

Accepted Answer

A)   Framing bias
B)   Excessive volatility
C)   Loss aversion
D)   Mental accountingE) B) and C)
F) A) and B)

Question 19

Trend analysts who follow bonds are most likely to monitor the ________.

Accepted Answer

A)   confidence index
B)   odd-lot trading
C)   short interest
D)   TRIN statisticE) B) and D)
F) B) and C)

Question 20

The moving average generates buy signal(s)  ________.

Accepted Answer

A)   on days 3, 11, and 15
B)   on days 2, 8, and 16
C)   on days 5, 9, and 13
D)   on no daysE) A) and B)
F) C) and D)

Exam 9: Behavioral Finance and Technical Analysis

You find that the confidence index is down, the market breadth is up, and the trin ratio is down. In total, how many bullish signs do you have?

Correct Answer
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Relative strength is ________ indicator.

Correct Answer
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On a particular day, there were 890 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 common measure of market breadth is ________.

Correct Answer
verified

According to market technicians, it is time to sell stock in a head-and-shoulders formation when ________.

Correct Answer
verified

Trend analysts who follow bonds are most likely to monitor the ________.

Correct Answer
verified

Even though indexing is growing in popularity, only about of equity in the mutual fund industry is held in indexed funds. This may be a sign that investors and managers .

Correct Answer
verified

Correct Answer
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Technical traders view mutual fund investors as ________ market timers.

Correct Answer
verified

Contrarian investors consider a high put/call ratio a ________.

Correct Answer
verified

The TRIN on day 2 is ________.

Correct Answer
verified

The cumulative tally of the number of advancing stocks minus declining stocks is called the ________.

Correct Answer
verified

Following a period of falling prices, the moving average will ________.

Correct Answer
verified

The cumulative breadth for the first 2 days is ________.

Correct Answer
verified

The moving average generates buy signal(s) ________.

Correct Answer
verified

Cumulative breadth for the 4 days is , which is .

Correct Answer
verified

From day 1 to day 4, the TRIN has and is .

Correct Answer
verified

A major problem with technical trading strategies is that ________.

Correct Answer
verified

If investors overweight recent performance in forecasting the future, they are exhibiting ________.

Correct Answer
verified

If investors are too slow to update their beliefs about a stock's future performance when new evidence arises, they are exhibiting ________.

Correct Answer
verified

The Elliott wave theory gives a buy signal when you can identify a primary bull trend by identifying ________.

Correct Answer
verified

Exam 9: Behavioral Finance and Technical Analysis

You find that the confidence index is down, the market breadth is up, and the trin ratio is down. In total, how many bullish signs do you have?

Correct AnswerverifiedShow Answer

Relative strength is ________ indicator.

Correct AnswerverifiedShow Answer

On a particular day, there were 890 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 common measure of market breadth is ________.

Correct AnswerverifiedShow Answer

According to market technicians, it is time to sell stock in a head-and-shoulders formation when ________.

Correct AnswerverifiedShow Answer

Trend analysts who follow bonds are most likely to monitor the ________.

Correct AnswerverifiedShow Answer

Even though indexing is growing in popularity, only about ________ of equity in the mutual fund industry is held in indexed funds. This may be a sign that investors and managers ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Technical traders view mutual fund investors as ________ market timers.

Correct AnswerverifiedShow Answer

Contrarian investors consider a high put/call ratio a ________.

Correct AnswerverifiedShow Answer

The TRIN on day 2 is ________.

Correct AnswerverifiedShow Answer

The cumulative tally of the number of advancing stocks minus declining stocks is called the ________.

Correct AnswerverifiedShow Answer

Following a period of falling prices, the moving average will ________.

Correct AnswerverifiedShow Answer

The cumulative breadth for the first 2 days is ________.

Correct AnswerverifiedShow Answer

The moving average generates buy signal(s) ________.

Correct AnswerverifiedShow Answer

Cumulative breadth for the 4 days is ________, which is ________.

Correct AnswerverifiedShow Answer

From day 1 to day 4, the TRIN has ________ and is ________.

Correct AnswerverifiedShow Answer

A major problem with technical trading strategies is that ________.

Correct AnswerverifiedShow Answer

If investors overweight recent performance in forecasting the future, they are exhibiting ________.

Correct AnswerverifiedShow Answer

If investors are too slow to update their beliefs about a stock's future performance when new evidence arises, they are exhibiting ________.

Correct AnswerverifiedShow Answer

The Elliott wave theory gives a buy signal when you can identify a primary bull trend by identifying ________.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Even though indexing is growing in popularity, only about of equity in the mutual fund industry is held in indexed funds. This may be a sign that investors and managers .

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Cumulative breadth for the 4 days is , which is .

Correct Answer
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From day 1 to day 4, the TRIN has and is .

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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