FIN 320 Week 6 Quiz – Strayer
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Quiz 4 Chapter 9
and 10
Chapter 9: ___________________________________________________________________________
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1.
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Testing many
different trading rules until you find one that would have worked in the past
is called _______.
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2.
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Models of financial
markets that emphasize psychological factors affecting investor behavior are
called _______.
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3.
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The trin statistic is
a ______ indicator.
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4.
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The put/call ratio is
a ______ indicator.
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5.
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Relative strength is
______ indicator.
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6.
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Short interest is a
______ indicator.
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7.
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Moving averages are
______ indicators.
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8.
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Market breadth is a
______ indicator.
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9.
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The cumulative tally
of the number of advancing stocks minus declining stocks is called the
______________.
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D.
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relative strength
ratio
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10.
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A high amount of
short interest is typically considered as a __________ signal, and
contrarians may consider it as a _________ signal.
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11.
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Technical analysis
focuses on _____________________.
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A.
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finding
opportunities for risk-free investing
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B.
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finding repeating
trends and patterns in prices
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C.
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changing prospects
for earnings growth of particular firms or industries
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D.
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forecasting
technical regulatory changes
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12.
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Behavioralists point
out that even if market prices are ____________, there may be
_______________.
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A.
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distorted; limited
arbitrage opportunities
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B.
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distorted;
fundamental efficiency
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C.
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allocationally
efficient; limitless arbitrage opportunities
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D.
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distorted;
allocational efficiency
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13.
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According to market
technicians, it is time to sell stock in a head-and-shoulders formation when
___________.
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A.
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the price index
pierces the left shoulder
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B.
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the price index
pierces the right shoulder
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C.
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the price index
pierces the head
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D.
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none of these
options takes place
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14.
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When a stock price
breaks through the moving average from below, this is considered to be
______.
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A.
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the starting point
for a new moving average
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15.
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When the stock price
falls below a moving average, a possible conclusion is that _____.
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A.
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market momentum has
become positive
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B.
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market momentum has
become negative
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C.
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there is no regular
pattern for this stock's market momentum
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D.
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professional
analysts' opinions are invalid until the stock price rises again
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16.
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Following a period of
falling prices, the moving average will _____.
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A.
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be below the
current price
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B.
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be above the
current price
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C.
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be equal to the
current price
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D.
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become more
volatile than it had been before prices fell
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17.
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A moving average of
stock prices _________________.
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A.
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always lies above
the most recent price
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B.
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always lies below
the most recent price
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C.
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is less volatile
than the actual prices
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D.
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is more volatile
than the actual prices
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18.
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When the housing
bubble burst in 2007, it set off the worst financial crisis _____.
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19.
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A support level is
___________________.
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A.
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a level beyond
which the market is unlikely to rise
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B.
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a level below which
the market is unlikely to fall
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C.
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an equilibrium
price level justified by characteristics such as earnings and cash flows
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D.
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the peak of a
market wave or cycle
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20.
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According to
Kondratieff, the macro economy moves in a series of waves that recur at
intervals of approximately _________________.
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21.
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According to Elliot's
wave theory, stock market behavior can be explained as
_________________.
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A.
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a series of
medium-term wave cycles with no short-term trend
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B.
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a series of
long-term wave cycles with no short-term trend
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C.
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a series of superimposed
long-term and short-term wave cycles
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D.
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sine and cosine
functions
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22.
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Conventional finance
theory assumes investors are _______, and behavioral finance assumes
investors are _______.
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23.
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The only way for
behavioral patterns to persist in prices is if ______________.
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A.
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markets are not
weak-form efficient
|
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B.
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there are limits to
arbitrage activity
|
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C.
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there are no
significant trading costs
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D.
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market psychology
is inconsistent over time
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24.
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In the context of a
point and figure chart, a horizontal band of Xs and Os is a
_____________.
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25.
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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 __________.
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A.
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5%; are excessively
conservative
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B.
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15%; overestimate
their ability
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C.
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20%; suffer from
framing biases
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D.
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25%; engage in
mental accounting
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26.
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If investors are too
slow to update their beliefs about a stock's future performance when new
evidence arises, they are exhibiting _______.
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A.
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representativeness
bias
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27.
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If investors
overweight recent performance in forecasting the future, they are exhibiting
_______.
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A.
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representativeness
bias
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28.
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Trading activity and
average returns in brokerage accounts tend to be _________.
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D.
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positively
correlated for women and negatively correlated for men
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29.
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Your two best friends
each tell you about a person they know who successfully started a small
business. That's it, you decide; if they can do it, so can you. This is an
example of _____________.
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D.
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representativeness
bias
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30.
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Which of the
following is not a sentiment
indicator?
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31.
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Which of the following
is considered a sentiment indicator?
|
A.
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A 200-day moving
average
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C.
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Credit balances in
brokerage accounts
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32.
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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 ___________.
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33.
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Which of the
following analysts focus more on past price movements of a firm's stock than
on the underlying determinants of its future profitability?
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34.
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A trin ratio of greater
than 1 is considered a __________.
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C.
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bearish signal by
some technical analysts and a bullish signal by other technical analysts
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35.
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Contrarian investors
consider a high put/call ratio a __________.
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C.
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trend confirmation
signal
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D.
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signal to enter the
options market
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36.
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The ratio of the
average yield on 10 top-rated corporate bonds to the average yield on 10 intermediate-grade
bonds is called the __________.
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C.
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relative strength
index
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37.
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An investor needs
cash to pay some hospital bills. He is willing to use his dividend income to
pay the bills, but he will not sell any stock to do so. He is engaging in
___________.
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38.
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Bill and Shelly are
friends. Bill invests in a portfolio of hot stocks that almost all his
friends are invested in. Shelly invests in a portfolio that is totally
different from the portfolios of all her friends. Both Bill's and Shelly's
stocks fall 15%. According to regret theory,
_________________________________________.
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A.
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Bill will have more
regret over the loss than Shelly
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B.
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Shelly will have
more regret over the loss than Bill
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C.
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Bill and Shelly
will have equal regret over their losses
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D.
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Bill's and Shelly's
risk aversion will increase in the future
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39.
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The most common
measure of __________ is the spread between the number of stocks that advance
in price and the number of stocks that decline in price.
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40.
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Jill is offered a
choice between receiving $50 with certainty or possibly receiving the
proceeds from a gamble. In the gamble a fair coin is tossed, and if it comes
up heads, Jill will receive $100; if the coin comes up tails, she will
receive nothing. Jill chooses the $50 instead of the gamble. Jill's behavior
indicates __________________.
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C.
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that she has a
diminishing marginal utility of wealth
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D.
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prospect theory
loss aversion
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41.
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When the market
breaks through the moving average line from below, a technical analyst would
probably suggest that it is a good time to ___________.
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42.
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If you believed in
the reversal effect, you should __________.
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A.
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buy bonds this
period if you held stocks last period
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B.
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buy stocks this
period that performed poorly last period
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C.
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buy stocks this
period that performed well last period
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D.
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do nothing if you
held the stock last period
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43.
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According to
technical analysts, a shift in market fundamentals will __________.
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A.
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be reflected in
stock prices immediately
|
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B.
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lead to a gradual
price change that can be recognized as a trend
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C.
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lead to high
volatility in stock market prices
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D.
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leave prices
unchanged
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44.
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According to market
technicians, a trin statistic of less than 1 is considered a
__________.
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45.
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It is difficult to
test the Kondratieff wave theory because _________.
|
A.
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it applies to only
Russian stocks
|
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B.
|
its main proponent
found contrary research results
|
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C.
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only two
independent data points are generated each century
|
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D.
|
the stock market is
too volatile to generate smooth waves
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46.
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A _________ is a
value above which it is difficult for the market to rise.
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47.
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_____________ is a
tool that can help identify the direction of a stock's price.
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48.
|
If the utility you
derive from your next dollar of wealth increases by less than a loss of a
dollar reduces it, you are exhibiting __________.
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49.
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In technical
analysis, __________ is a value below which the market is relatively unlikely
to fall.
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50.
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A possible limit on
arbitrage activity that may allow behavioral biases to persist is
_______.
|
A.
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technical trends in
prices
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51.
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If you are not a
contrarian, you consider a high put/call ratio to be a __________.
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C.
|
trend confirmation
signal
|
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D.
|
signal to enter the
options market
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52.
|
On day 1, the stock
price of Ford was $12 and the automotive stock index was 127. On day 2, the
stock price of Ford was $15 and the automotive stock index was 139. Consider
the ratio of Ford to the automotive stock index at day 1 and day 2. Ford is
__________ the automotive industry, and technical analysts who follow
relative strength would advise __________ the stock.
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B.
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outperforming;
selling
|
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C.
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underperforming;
buying
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D.
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underperforming;
selling
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53.
|
At the end of July,
the average yields on 10 top-rated corporate bonds and 10 intermediate-grade
bonds were 7.65% and 8.42%, respectively. At the end of August, the average
yields on 10 top-rated corporate bonds and 10 intermediate-grade bonds were
6% and 6.71%, respectively. The confidence index _________ during August, and
bond technical analysts are likely to be ________.
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54.
|
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 __________.
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55.
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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 __________.
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56.
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An accumulation of
cash by mutual funds may be viewed by technical traders as a __________
indicator.
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57.
|
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
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58.
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When technical
analysts say a stock has good "relative strength," they mean that
in the recent past __________.
|
A.
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it has performed
well compared to its closest competitors
|
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B.
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it has exceeded its
own historical high
|
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C.
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trading volume in
the stock has exceeded the normal trading volume
|
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D.
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it has outperformed
the market index
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59.
|
Technical traders
view mutual fund investors as _________ market timers.
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60.
|
An important
assumption underlying the use of technical analysis techniques is that
___________________.
|
A.
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security prices
adjust rapidly to new information
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B.
|
security prices
adjust gradually to new information
|
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C.
|
security dealers
will provide enough liquidity to keep price changes relatively small
|
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D.
|
all investors have
immediate and costless access to information
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