technical - Ch. 16, Chapter 16: Technical Analysis Multiple...

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Ch. 16, Chapter 16: Technical Analysis Multiple Choice Questions 1. The oldest approach to common stock selection is: a. fundamental analysis b. technical analysis c. random walk analysis d. value analysis Ans: b Difficulty: easy Ref: Overview 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. Ans: c Difficulty: easy Ref: What is Technical Analysis? 3. Technical analysis is sometimes called market or ________ analysis. a. external. b. internal. c. quantitative. d. qualitative. Ans: b Difficulty: moderate Ref: What is Technical Analysis? 4. The two primary tools of a technical analyst are: Chapter Sixteen Technical Analysis 204
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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. Ans: c Difficulty: moderate Ref: What is Technical Analysis? 5. What do technical analysts believe is the best source of data to use in analyzing stocks?: a. corporate earnings growth prospects. b. the market itself. c. Current P/E ratios versus historical ratios. d. .Insider buying of shares. Ans: b Difficulty: moderate Ref: What is Technical Analysis? 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. Ans: b Difficulty: easy Ref: What is Technical Analysis? 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. Ans: b Difficulty: difficult Ref: What is Technical Analysis? Chapter Sixteen Technical Analysis 205
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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. Ans: c Difficulty: moderate Ref: Stock Price and Volume Techniques 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. Ans: a Difficulty: moderate Ref: Stock Price and Volume Techniques 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.
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technical - Ch. 16, Chapter 16: Technical Analysis Multiple...

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