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1. One of the most popular tools used by technical analysts is ___________.
A. P/E ratio
B. book-to-market-value ratio
C. moving averages
D. growth rate of dividends
2. A bar chart is used to illustrate ___________.
A. high, low and closing stock prices on a daily basis
B. reversal in the direction of stock prices without consideration of time
C. high, low, opening and closing prices on a daily basis
D. advances and declines of stock prices
3. According to the Dow Theory, daily fluctuations and secondary movements in the stock market are used to identify the ___________.
A. intermediate trend
B. seasonal pattern
C. short-term trend
D. primary trend
4. Which of the following indicates a sell signal to technical analysts?
A. The advance-decline line is rising in a falling market.
B. The amount of short selling done by specialists is high.
C. The resistance level is broken.
D. The majority of stock market newsletters are bearish.
5. Which of the following indicates a buy signal to technical analysts?
A. Both the Dow Jones Industrial Average and the Dow Jones Transportation Average are moving down.
B. Odd-lot buying exceeds odd-lot selling.
C. The advance-decline line is falling in a rising market.
D. The stock breaks through the moving average line from below.
6. Which of the following highlights traders' opinions about the market?
A. Sentiment indicators
B. Leading indicators
C. Moving averages
D. Breadth indicators
7. When odd-lot selling exceeds odd-lot buying, this is considered a ___________.
A. neutral signal
B. signal to switch from stocks to bonds
C. bullish signal
D. bearish signal
8. When technical analysts say a stock has good relative strength, they mean the ___________.
A. ratio of the price of the stock to a market index has trended upwards
B. recent trading volume in the stock has exceeded the normal trading volume
C. total return on the stock has exceeded the total return on other stocks in the same industry
D. stock has performed well compared to other stocks in the same industry
9. A basic assumption of technical analysis in contrast to fundamental analysis is that ___________.
A. financial statements provide information crucial in valuing a stock
B. a technical analyst would evaluate the amount of short selling, the volume of trading, and the P/E ratio of a stock
C. the stock market is inefficient
D. security prices move in patterns, which repeat over long periods
10. A resistance level is the price range at which technical analysts would expect the ___________.
A. demand of a stock to decrease substantially
B. demand of a stock to increase substantially
C. supply of a stock to increase substantially
D. supply of a stock to decrease substantially
Answers: 1 – C, 2 – A, 3 – D, 4 – B, 5 – D, 6 – B, 7 – C, 8 – A, 9 – B, 10 – A
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