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Mcqs 1

The document discusses various concepts in technical analysis and the Dow Theory. It provides multiple choice questions to test understanding. Specifically: - The oldest approach to common stock selection is fundamental analysis. - Technical analysis reflects the idea that stock prices move in trends. - According to Dow Theory, daily fluctuations are used to identify the primary trend. - The two primary tools of a technical analyst are price and volume. - A principal weakness of Dow Theory is that it pays too much attention to primary trends.

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aashir ch
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566 views2 pages

Mcqs 1

The document discusses various concepts in technical analysis and the Dow Theory. It provides multiple choice questions to test understanding. Specifically: - The oldest approach to common stock selection is fundamental analysis. - Technical analysis reflects the idea that stock prices move in trends. - According to Dow Theory, daily fluctuations are used to identify the primary trend. - The two primary tools of a technical analyst are price and volume. - A principal weakness of Dow Theory is that it pays too much attention to primary trends.

Uploaded by

aashir ch
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

The oldest approach to common stock selection is:

a. fundamental analysis
b. technical analysis
c. random walk analysis
d. value 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.
3. According to the Dow Theory, daily fluctuations and secondary movements in
the stock market are used to identify the:
a. short-term trend
b. primary trend
c. moving average

d. intermediate trend
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.

5. 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.
6. A principal weakness of the Dow Theory is:

a. Its use of averages instead of indexes.


b. Its attention to general market movements.
c. That it pays too much attention to primary trends.
d. The many versions that are available.
7. Volume and specific calendar time are not considered important in a:

a. Pie chart.
b. point and figure chart
c. Bar chart.
d. Histogram.

8. What is usually shown at the bottom of a bar chart?

a. a point and figure chart


b. advance/decline line
c. closing price
d. volume
9. Which of the following is not a contrary trading rule?

a. Relative strength ratio


b. Investment advisory opinions
c. Mutual fund liquidity positions
d. Put/call ratio

Which of the following is not one of the tests of a technical trading rule?

a. Transaction and other costs


b. Consistency
c. Return
d. Risk
10. Which of the following is a characteristic of the short interest ratio: It is:

a. Calculated daily as well as weekly.


b. Often interpreted without any additional information.
c. Between 2 and 3 in recent times.
d. Considered a measure of investor sentiment.
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.
c. Utility average must lead the transportation average.
d. Transportation and industrial average must confirm each other.
12 When each successive peak and through a higher, it refers to as:
a. Upward trend
b. Downward trend
c. Horizontal trend
d. None of these

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