Question 1

The most common measure of __________ is the spread between the number of stocks which advance in price and the number of stocks which decline in price.

Accepted Answer

A)   market breadth
B)   market volume
C)   odd-lot trading
D)   short interestE) A) and B)
F) B) and D)

Question 2

Testing many different trading rules until you find one that would have worked in the past is called _______.

Accepted Answer

A)   data mining
B)   perceived patterning
C)   pattern searching
D)   behavioral analysisE) B) and D)
F) A) and C)

Question 3

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)   10%; overestimate their ability
C)   15%; suffer from framing biases
D)   20%; engage in mental accountingE) B) and D)
F) A) and B)

Question 4

According to Elliot wave theory,the stock market behavior can be explained as _________________.

Accepted Answer

A)   a series of medium-term wave cycles with no short-term trend
B)   a series of long-term wave cycles with no short-term trend
C)   a series of superimposed long-term and short-term wave cycles
D)   sine and cosine functionsE) B) and C)
F) A) and D) C

Question 5

Identify the resistance level stock price.

Accepted Answer

A)   $40
B)   $42
C)   $44
D)   $46E) B) and C)
F) A) and B)

Question 6

During a period when prices have been rising the _________ will be _______ the current price.

Accepted Answer

A)   relative strength index; declining with
B)   relative strength index; declining faster than
C)   moving average; above
D)   moving average; belowE) A) and B)
F) A) and D)

Question 7

__________ is considered the grandfather of technical analysis.

Accepted Answer

A)   Fischer Black
B)   John Bratton
C)   Charles Dow
D)   Stanley ShapiroE) A) and B)
F) A) and C)

Question 8

An investor holds a very conservative portfolio invested for retirement but she takes some extra cash she earned from her year-end bonus and buys gold futures.She appears to be engaging in ___________.

Accepted Answer

A)   overconfidence
B)   representativeness
C)   forecast errors
D)   mental accountingE) A) and D)
F) A) and C)

Question 9

Market breadth is a ______ indicator.

Accepted Answer

A)   sentiment
B)   flow of funds
C)   technical
D)   fundamentalE) B) and C)
F) C) and D)

Question 10

The put/call ratio is a ______ indicator.

Accepted Answer

A)   sentiment
B)   flow of funds
C)   market structure
D)   fundamentalE) None of the above
F) A) and D)

Question 11

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) B) and C)
F) None of the above

Question 12

Cumulative Breadth for the four days is ___ which is ___.

Accepted Answer

A)   -140, bullish
B)   -140, bearish
C)   -300, bullish
D)   -300, bearishE) A) and C)
F) A) and B)

Question 13

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.like technical trading rules,behavioralists can always find some pattern in past data that supports a behavioralist trait

Accepted Answer

A)   I only
B)   II only
C)   I and III only
D)   I, II and IIIE) All of the above
F) C) and D)

Question 14

Which one of the following statements on the Dow Theory is correct?

Accepted Answer

A)   The Elliot wave theory is the only recent variation of the Dow Theory.
B)   The theory of Kondratieff waves is the only recent variation of the Dow Theory.
C)   Both the Elliot wave theory and the theory of Kondratieff waves are recent variations of the Dow Theory.
D)   Neither the Elliot wave theory nor the theory of Kondratieff waves are recent variations of the Dow Theory.E) None of the above
F) A) and B) C

Question 15

The tendency of investors to hold on to losing investments is called the ________.

Accepted Answer

A)   overweighting effect
B)   head-in-the-sand effect
C)   disposition effect
D)   prospector effectE) A) and B)
F) All of the above

Question 16

Investors gravitate towards the latest hot stock even though it has never paid a dividend.Even though net income is projected to fall over the current and next several years,the price of the stock continues to rise.What behavioral concept may explain this price pattern?

Accepted Answer

A)   Overconfidence
B)   Loss aversion
C)   Mental accounting
D)   Calendar biasE) None of the above
F) A) and C)

Question 17

Contrarian investors consider a high put/call ratio as __________.

Accepted Answer

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

Question 18

According to the Dow Theory there are ______ key forces which simultaneously affect stock prices.

Accepted Answer

A)   2
B)   3
C)   4
D)   5E) B) and C)
F) A) and D)

Question 19

Technical traders view mutual fund investors as _________ market timers.

Accepted Answer

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

Question 20

If mutual fund portfolios are heavy in cash,market contrarians may interpret this as what kind of signal?

Accepted Answer

A)   Buy signal
B)   Sell signal
C)   Hold signal
D)   This is not interpreted as a signalE) None of the above
F) A) and B) B

Exam 9: Behavioral Finance and Technical Analysis

The most common measure of __________ is the spread between the number of stocks which advance in price and the number of stocks which decline in price.

Correct Answer
verified

Testing many different trading rules until you find one that would have worked in the past is called _______.

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

According to Elliot wave theory,the stock market behavior can be explained as _________________.

Correct Answer
verified
C

Identify the resistance level stock price.

Correct Answer
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During a period when prices have been rising the ___ will be _ the current price.

Correct Answer
verified

__________ is considered the grandfather of technical analysis.

Correct Answer
verified

An investor holds a very conservative portfolio invested for retirement but she takes some extra cash she earned from her year-end bonus and buys gold futures.She appears to be engaging in ___________.

Correct Answer
verified

Market breadth is a ______ indicator.

Correct Answer
verified

The put/call ratio is a ______ indicator.

Correct Answer
verified

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

Correct Answer
verified

Cumulative Breadth for the four days is _ which is _.

Correct Answer
verified

Correct Answer
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Which one of the following statements on the Dow Theory is correct?

Correct Answer
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C

The tendency of investors to hold on to losing investments is called the ________.

Correct Answer
verified

Investors gravitate towards the latest hot stock even though it has never paid a dividend.Even though net income is projected to fall over the current and next several years,the price of the stock continues to rise.What behavioral concept may explain this price pattern?

Correct Answer
verified

Contrarian investors consider a high put/call ratio as __________.

Correct Answer
verified

According to the Dow Theory there are ______ key forces which simultaneously affect stock prices.

Correct Answer
verified

Technical traders view mutual fund investors as _________ market timers.

Correct Answer
verified

If mutual fund portfolios are heavy in cash,market contrarians may interpret this as what kind of signal?

Correct Answer
verified
B

Exam 9: Behavioral Finance and Technical Analysis

The most common measure of __________ is the spread between the number of stocks which advance in price and the number of stocks which decline in price.

Correct AnswerverifiedShow Answer

Testing many different trading rules until you find one that would have worked in the past is called _______.

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

According to Elliot wave theory,the stock market behavior can be explained as _________________.

Correct AnswerverifiedC

Identify the resistance level stock price.

Correct AnswerverifiedShow Answer

During a period when prices have been rising the _________ will be _______ the current price.

Correct AnswerverifiedShow Answer

__________ is considered the grandfather of technical analysis.

Correct AnswerverifiedShow Answer

An investor holds a very conservative portfolio invested for retirement but she takes some extra cash she earned from her year-end bonus and buys gold futures.She appears to be engaging in ___________.

Correct AnswerverifiedShow Answer

Market breadth is a ______ indicator.

Correct AnswerverifiedShow Answer

The put/call ratio is a ______ indicator.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Cumulative Breadth for the four days is ___ which is ___.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following statements on the Dow Theory is correct?

Correct AnswerverifiedC

The tendency of investors to hold on to losing investments is called the ________.

Correct AnswerverifiedShow Answer

Investors gravitate towards the latest hot stock even though it has never paid a dividend.Even though net income is projected to fall over the current and next several years,the price of the stock continues to rise.What behavioral concept may explain this price pattern?

Correct AnswerverifiedShow Answer

Contrarian investors consider a high put/call ratio as __________.

Correct AnswerverifiedShow Answer

According to the Dow Theory there are ______ key forces which simultaneously affect stock prices.

Correct AnswerverifiedShow Answer

Technical traders view mutual fund investors as _________ market timers.

Correct AnswerverifiedShow Answer

If mutual fund portfolios are heavy in cash,market contrarians may interpret this as what kind of signal?

Correct AnswerverifiedB

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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C

Correct Answer
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During a period when prices have been rising the ___ will be _ the current price.

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 four days is _ which is _.

Correct Answer
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Correct Answer
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Correct Answer
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C

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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B