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1 | |
Investors are generally loss averse. |
| | A) | True |
| | B) | False |
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2 | |
The hesitancy to make a decision for fear the decision might turn out to be less optimal than it could have been is called myopic loss aversion. |
| | A) | True |
| | B) | False |
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3 | |
According to the self-attribution bias, individuals are more apt to accept personal responsibility for a failure than for a success. |
| | A) | True |
| | B) | False |
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4 | |
Investors tend to: |
| | A) | make identical decisions whether they frame a problem in broad or narrow terms. |
| | B) | take more risk to earn a $1 profit than to avoid a $1 loss. |
| | C) | focus more on their overall wealth than on individual gains and losses if they are irrational. |
| | D) | be affected by frame dependence. |
| | E) | be unaffected emotionally by gains or losses. |
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5 | |
Overconfidence tends to cause investors to:- I. invest too heavily in local firms.
- II. earn lower returns due to excess trading.
- III. invest too much in their employer's stock.
- IV. trade too frequently.
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| | A) | I and III only |
| | B) | II and IV only |
| | C) | I, II, and III only |
| | D) | II, III, and IV only |
| | E) | I, II, III, and IV |
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6 | |
The market sentiment index is computed as: |
| | A) | Number of bullish investors / (Number of bearish investors × Number of bullish investors). |
| | B) | Number of bullish investors / (Number of bearish investors − Number of bullish investors). |
| | C) | Number of bearish investors / (Number of bearish investors + Number of bullish investors). |
| | D) | Number of bearish investors / (Number of bearish investors − Number of bullish investors). |
| | E) | Number of bearish investors / (Number of bearish investors × Number of bullish investors). |
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7 | |
According to technical analysts, the stock market has just broken through the support level. According to these analysts, the stock market is expected to: |
| | A) | increase in value in sporadic moves. |
| | B) | continuing rising in value. |
| | C) | pull back to within its normal valuation limits. |
| | D) | further decline in value. |
| | E) | become totally unpredictable. |
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8 | |
A neckline is: |
| | A) | an upward sloping channel line. |
| | B) | a main trendline for the overall market. |
| | C) | the moving average of a head and shoulders pattern. |
| | D) | a head and shoulders support line. |
| | E) | a head and shoulders resistance line. |
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9 | |
What is the 4-day exponential moving average if the closing prices for the 4-day period are $13.26, $13.09, $13.87, and $13.56? Assume that a weight of 50 percent of the average weight is placed on the most recent price. |
| | A) | $13.42 |
| | B) | $13.45 |
| | C) | $13.48 |
| | D) | $13.52 |
| | E) | $13.55 |
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10 | |
What is the net money flow for a day in which a stock traded as follows?| Price | Volume | | $32.60 | n/a | | $32.40 | 7,400 | | $32.25 | 11,500 | | $32.45 | 8,200 | | $32.45 | 4,900 |
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| | A) | -344,545 |
| | B) | -321,675 |
| | C) | -311,850 |
| | D) | -310,500 |
| | E) | -289,065 |
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