FIN 320 Week 11 Final Exam – Strayer

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Chapters 9, 10, 12 Through 15 And 17 Through 22

9

Student: ___________________________________________________________________________

1.	Testing many different trading rules until you find one that would have worked in the past is called _______.    A.  data mining B.  perceived patterning C.  pattern searching D.  behavioral analysis

2.	Models of financial markets that emphasize psychological factors affecting investor behavior are called _______.    A.  data mining B.  fundamental analysis C.  charting D.  behavioral finance

3.	The trin statistic is a ______ indicator.    A.  sentiment B.  flow of funds C.  market structure D.  fundamental

4.	The put/call ratio is a ______ indicator.    A.  sentiment B.  flow of funds C.  market structure D.  fundamental

5.	Relative strength is ______ indicator.    A.  a fundamental B.  an economic C.  a technical D.  an international

6.	Short interest is a ______ indicator.    A.  sentiment B.  flow of funds C.  market structure D.  fundamental

7.	Moving averages are ______ indicators.    A.  sentiment B.  flow of funds C.  trend D.  fundamental

8.	Market breadth is a ______ indicator.    A.  sentiment B.  flow of funds C.  technical D.  fundamental

9.	The cumulative tally of the number of advancing stocks minus declining stocks is called the ______________.    A.  market breadth B.  market volume C.  trin ratio D.  relative strength ratio

10.	A high amount of short interest is typically considered as a __________ signal, and contrarians may consider it as a _________ signal.    A.  bearish; bullish B.  bullish; bearish C.  bearish; false D.  bullish; false

11.	Technical analysis focuses on _____________________.    A.  finding opportunities for risk-free investing B.  finding repeating trends and patterns in prices C.  changing prospects for earnings growth of particular firms or industries D.  forecasting technical regulatory changes

12.	Behavioralists point out that even if market prices are ____________, there may be _______________.    A.  distorted; limited arbitrage opportunities B.  distorted; fundamental efficiency C.  allocationally efficient; limitless arbitrage opportunities D.  distorted; allocational efficiency

13.	According to market technicians, it is time to sell stock in a head-and-shoulders formation when ___________.    A.  the price index pierces the left shoulder B.  the price index pierces the right shoulder C.  the price index pierces the head D.  none of these options takes place

14.	When a stock price breaks through the moving average from below, this is considered to be ______.    A.  the starting point for a new moving average B.  a bearish signal C.  a bullish signal D.  none of these options

15.

When the stock price falls below a moving average, a possible conclusion is that _____.    A.  market momentum has become positive B.  market momentum has become negative C.  there is no regular pattern for this stock's market momentum D.  professional analysts' opinions are invalid until the stock price rises again

16.	Following a period of falling prices, the moving average will _____.    A.  be below the current price B.  be above the current price C.  be equal to the current price D.  become more volatile than it had been before prices fell

17.	A moving average of stock prices _________________.    A.  always lies above the most recent price B.  always lies below the most recent price C.  is less volatile than the actual prices D.  is more volatile than the actual prices

18.	When the housing bubble burst in 2007, it set off the worst financial crisis _____.    A.  in 25 years. B.  in 40 years. C.  in 50 years. D.  in 75 years.

19.	A support level is ___________________.    A.  a level beyond which the market is unlikely to rise B.  a level below which the market is unlikely to fall C.  an equilibrium price level justified by characteristics such as earnings and cash flows D.  the peak of a market wave or cycle

20.	According to Kondratieff, the macro economy moves in a series of waves that recur at intervals of approximately _________________.    A.  18 months B.  4 years C.  8 years D.  50 years

21.

According to Elliot's wave theory, stock market behavior can be explained as _________________.    A.  a series of medium-term wave cycles with no short-term trend B.  a series of long-term wave cycles with no short-term trend C.  a series of superimposed long-term and short-term wave cycles D.  sine and cosine functions

22.	Conventional finance theory assumes investors are _______, and behavioral finance assumes investors are _______.    A.  rational; irrational B.  irrational; rational C.  greedy; philanthropic D.  philanthropic; greedy

23.	The only way for behavioral patterns to persist in prices is if ______________.    A.  markets are not weak-form efficient B.  there are limits to arbitrage activity C.  there are no significant trading costs D.  market psychology is inconsistent over time

24.	In the context of a point and figure chart, a horizontal band of Xs and Os is a _____________.    A.  buy signal B.  sell signal C.  congestion area D.  trend reversal

25.

Even though indexing is growing in popularity, only about _____ of equity in the mutual fund industry is held in indexed funds. This may be a sign that investors and managers __________.    A.  5%; are excessively conservative B.  15%; overestimate their ability C.  20%; suffer from framing biases D.  25%; engage in mental accounting

26.	If investors are too slow to update their beliefs about a stock's future performance when new evidence arises, they are exhibiting _______.    A.  representativeness bias B.  framing error C.  conservatism D.  memory bias

27.	If investors overweight recent performance in forecasting the future, they are exhibiting _______.    A.  representativeness bias B.  framing error C.  memory bias D.  overconfidence