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Investments, 4th Canadian Edition, 4/e

Zvi Bodie, Boston University School of Management
Alex Kane, University of California, San Diego
Alan Marcus, Boston College
Stylianos Perrakis, Concordia University
Peter Ryan, University of Ottawa

Technical Analysis

Multiple Choice Quiz

Prepared by William Lim, University of New Brunswick.


1	Technical analysts are sometimes called
		A)	arbitrageurs.
		B)	efficient markets proponents.
		C)	chartists.
		D)	all of the above.
		E)	none of the above.


2	The force/s affecting stock prices by the Dow theory is/are:
		A)	a. primary trend
		B)	b. secondary trend
		C)	c. tertiary trend
		D)	a and b
		E)	a, b and c


3	Technical analysts use which of the following indicators besides charts?
		A)	Sentiment indicators.
		B)	Flow of funds indicators.
		C)	Market structure indicators.
		D)	All of the above.
		E)	None of the above.


4	Technical analysts believe that the bear market in the U.S. in 2002 is due to:
		A)	a. 2002 being the second year of a Republican president's term.
		B)	b. the terrorist attacks in 2001.
		C)	c. an AFC team, the New England Patriots, winning the Superbowl that year.
		D)	a. and b.
		E)	a. and c.


5	The extent to which movement in a market index is reflected widely in the price movements of all the stocks in the market is known as the ______ of the market.
		A)	length
		B)	breadth
		C)	depth
		D)	thickness
		E)	volatility


6	Jegadeesh and Titman (1993) found that:
		A)	relative strength is persistent for several months.
		B)	relative strength is persistent for more than a year.
		C)	the auto industry exhibited relative strength in the U.S.
		D)	the auto industry exhibited relative strength in Canada.
		E)	none of the above


7	The components of the Value Line ranking system include:
		A)	a. relative earnings momentum.
		B)	b. retained earnings/total assets
		C)	c. earnings surprise.
		D)	a., b. and c.
		E)	a. and c.


8	The Efficient Markets Hypothesis is at odds with the use of:
		A)	technical analysis.
		B)	neural networks.
		C)	fundamental analysis.
		D)	all of the above.
		E)	none of the above.


9	Which of the following refutes the usefulness of technical analysis?
		A)	a. economic value added.
		B)	b. efficient markets hypothesis.
		C)	c. fundamental analysis.
		D)	a. and b.
		E)	b. and c.


10	Using the Dow theory in the case of Nortel from 2000-2002 would result in:
		A)	identifying the upward movement of Nortel's price as a secondary trend that would be corrected.
		B)	identifying the downward movement of Nortel's price as a primary trend.
		C)	identifying the upward movement of Nortel's price as a primary trend with the downward movements as secondary trends that would be corrected.
		D)	all of the above.
		E)	none of the above.

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