ch16 - Chapter 16 TECHNICAL ANALYSIS Multiple Choice...

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Chapter 16 TECHNICAL ANALYSIS Multiple Choice Questions Overview 1. The oldest approach to common stock selection is: a. fundamental analysis b. technical analysis c. random walk analysis d. value analysis (b, easy) What is Technical Analysis? 2. Technical analysis reflects the idea that stock prices: a. move upward over time. b. move inversely over time. c. move in trends. d. move randomly. (c, easy) 3. Market data includes all of the following except: a. number of shares traded. b. earnings. c. level of market indices. d. stock price. (b, moderate) 4. The two primary tools of a technical analyst are: a. level of the market index and volume. b. economic indicators and level of the market index. c. price and volume. d. price and technical indicators. (c, moderate) Chapter Sixteen Technical Analysis 204
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5. Conventional technical analysis emphasizes: a. only the aggregate stock market. b. either the aggregate stock market or individual stocks. c. only individual stocks. d. only corporate securities. (b, moderate) 6. Technical analysis differs from fundamental analysis in that technical analysis: a. is aimed at the market while fundamental analysis is aimed at individual stocks. b. is based on published market data and focuses on internal factors. c. focuses on the long-term trends of production. d. does not consider price and volume. (b, easy) 7. All of the following are assumptions made by technical analysts except: a. Changes in trend are caused by shifts in supply and demand relationships. b. Stock price movements are independent. c. Security prices tend to move in trends. d. Supply and demand of securities are determined by various factors. (b, difficult) Stock Price and Volume Techniques 8. Which of the following is not true regarding the Dow Theory? a. It is intended to forecast the start of a primary movement. b. It does not forecast how long a movement will last. c. It has a very high success rate. d. It is subject to many criticisms. (c, moderate) 9. A support level is a price range: a. at which a significant increase in demand for a stock is expected. b. at which a significant increase in supply of a stock is expected. c. below which a stock price cannot go. d. above which a stock price cannot go. (a, moderate) Chapter Sixteen Technical Analysis 205
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10. Which of the following is not one of the three major variables to be decided by the investor in order to construct a moving average? a. price used. b. time period. c. weight to be used. d. type of moving average to be constructed. (c, moderate) 11. In order to have confirmation of a major market trend under the Dow Theory, the: a. industrial and utility averages must confirm each other. b. transportation and utility averages must confirm each. other.
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ch16 - Chapter 16 TECHNICAL ANALYSIS Multiple Choice...

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