EMT Practice Test

1. Question Content...

---

Question1: Which of the following is one of the key rules for traders?

Question2: When a market exceeds the high of the previous 4 weeks, cycle logic indicates that which of the following cycles has bottomed and turned up?

Question3: What is the position of the MTA Code of Ethics as it pertains to trading on inside information?

Question4: What is the MTA's position with respect to knowledge of client and employer information:

Question5: To calculate moving averages for a point-and-figure chart:

Question6: A technical analyst was at a convention in which a long-term point and figure stock chart was being discusseD. He noticed that low-price action did not appear as active as high-price action on the chart. One suggestion the technical analyst could provide, to clear up this apparent distortion, would be to:

Question7: What is the proper use of long-term charts versus daily price charts?

Question8: The Efficient Market Hypothesis assumes that:
I. Most investors will act rationally
II. Most investors will act irrationally
III. Prices typically reflect all available information
IV. Prices typically do not reflect all available information

Question9: Which of the following is not a method used by Technical analysts to determine trading systems?

Question10: All of the following most directly measure internal market strength, EXCEPT:

Question11: Which of the following factors would increase the predictive power of the evening star pattern?

Question12: Identify the following assumption under the correlation coefficient:

Question13: What are common mistakes made by impatient traders?

Question14: Which of the following is a CORRECT usage of an oscillator constructed using two moving averages?

Question15: If we increase the sample size what effect does it have on the approximation/outcome of the statistical tests?

Question16: What is the general term for rate-of-change momentum indicators:

Question17: Which of the following is a CORRECT interpretation of the shooting star pattern?

Question18: Which of the following is most likely to occur when the overall market is deeply oversold and on the verge of reversing?

Question19: Which of the following is NOT true of the rising and falling three methods patterns?

Question20: Which of the following statement states the correct percentage of the percentage gain on a loss of 50 percent?

Question21: Which of the following asset classes as a leading indicator for the stock market?

Question22: Which of the following is true of moving average crossovers?

Question23: Which of the following is an INCORRECT interpretation of the put-call ratio?

Question24: Which of the following pieces of information is NOT contained in the CFTC's Commitment of Traders report?

Question25: ___________ is used for comparing the long-term performance of one system against another.

Question26: Which crossover in MACD-Histogram is the strongest signal generated in the following chart of Alphabet Inc.
C ABD

Question27: How can one identify the existence of a cycle?

Question28: Which of the following is a general rule for trading futures?

Question29: A trend based trading system where signals occur when the current price reaches a new high or low:

Question30: Which of the following is MOST often a reversal pattern:

Question31: Which of the following is not a characteristic of a normal distribution? Choose the best possible answer.

Question32: Which of the following is an important point in interpreting chart patterns?

Question33: Which is NOT true of the three advancing white soldiers' pattern?

Question34: __________ is used to calculate the relative volatility of the current portfolio compared to the benchmark by calculating the annualized return less the risk-free return and then divided by beta.

Question35: Which of the following is the MOST likely use of an oscillator in a trading system:

Question36: An evening doji star:

Question37: Which of the following is true of the harami pattern?

Question38: Which of the following is a FALSE statement about MACD?

Question39: The stochastic oscillator was created utilizing which basic observation?

Question40: Which of the following best helps quantify the risk of a trading system?

Question41: Which of the following applies to the interpretation of point and figure charts in analyzing futures prices?

Question42: Which of the following is true of the Efficient Frontier concept in modern portfolio theory?

Question43: The strength and direction of the relationship between two markets is measured by:

Question44: Can stock prices be normally distributed and are stock returns normally distributed?

Question45: A trend based trading system where signals occur when the current high or low price exceeds the previous high or low price:

Question46: Which of the following is a CORRECT point and figure chart pattern interpretation?

Question47: Stocks with superior fundamentals will normally decouple and start outperforming on an relative basis during:

Question48: Which of the following is a TRUE statement about the Stochastic Oscillator?

Question49: Which of the following is a proper technical usage of MACD indicators?

Question50: Which of the following is true of moving average construction?

Question51: Which of the following factors would be a CORRECT interpretation of the morning star pattern?

Question52: Which of the following factors would increase the predictive power of an engulfing pattern?

Question53: Which of the following are FALSE statements when describing the Chaikin Money Flow Index?

Question54: Adam Green, a portfolio manager, is making a presentation to a prospective client. Green says that as a new portfolio manager, he made an average annual rate of return of 40% in the last two years at his previous firm and that based on this, he can guarantee a 40% return to the client. Which of the following statements is in accordance with Standard III(D), Performance Presentation?

Question55: Which of the following is a true statement according to Elliott Wave Theory?

Question56: Which of the following is an INCORRECT interpretation of the candlestick piercing pattern?

Question57: A trend based trading system where signals occur when the current high or low price exceeds the previous swing high or low price:

Question58: Standard deviation is:

Question59: Which of the following describes the McClellan Oscillator?

Question60: Staying the course in a trading strategy GENERALLY entails?

Question61: Using the Point-and-Figure method what is the standard method used to portray the volume on the chart?

Question62: Which of the following is not a disadvantage of the patterns that are formed by Broadening formations?

Question63: Reversals in point and figure charts:

Question64: Paul Jones is a chemical industry research analyst for a large brokerage company. That industry is currently seeing an increase in mergers and acquisitions. While flying through Chicago, Jones sees several senior officers who she knows are from the largest and fourth largest chemical companies walk into a conference room. She concludes that negotiations for an acquisition might be taking place. Jones:

Question65: Which of the following conditions is an absolute must for a true divergence based on the MACD histogram?

Question66: Prior to a market top, what would one expect to see in a VIX reading?

Question67: How would one improve a trading system utilizing band penetrations as trading signals which is giving too many unprofitable trade signals?

Question68: Which of the following is the MOST important thing to keep in mind in attempting to find a perfect indicator?

Question69: What percentage of return should be earned if you have $100 in the capital and sustain a 20% loss to return to the break-even level of $100?

Question70: Which of the following are valid interpretations of the put-call ratio?

Question71: Which of the following is true of Wilder's Parabolic System?

Question72: Which of the following is the short-term trading cycle that tends to influence most commodity markets?

Question73: On which of the following factors will the analyst choose the scale for the trend analysis?

Question74: Which of the following would be a valid trading interpretation of head and shoulder chart patterns?

Question75: Which of the following is a diversification technique in trading?

Question76: Which one of the following most accurately describes the CFA Institute Standard about using material nonpublic information?

Question77: Which of the following is the BEST volume indicator for analysis of futures trading?

Question78: Which of the following is a continuation pattern?

Question79: Which of the following is a valid guideline in using technical analysis to make investment decisions among stock market sectors?

Question80: A trend-based trading system where the trend is the weighting of the recent closing prices by a smoothing constant:

Question81: When using a two moving averages (MA. system, which of the following rules can be utilized to generate a buy signal?

Question82: Which of the following is a CORRECT usage of oscillators in technical analysis?

Question83: In some point-and-figure charts, what is the actual representation of the new price recorded on the chart?

Question84: Which would be the MOST useful aspect of a cycle in studying the relationship between cycles of different lengths?

Question85: If 300 shares traded at a certain price which of the following conclusions cant be drawn from this given situation?

Question86: Most of these indicators measure what uninformed investors are doing.

Question87: Which of the following is NOT a momentum indicator:

Question88: Which of the following is considered a continuation pattern?

Question89: How might one detrend data to determine if a cycle exists?

Question90: If a peak occurs prior to the halfway point of a cycle, this would be considered:

Question91: Which of the following is the CORRECT order of the Industrial Life Cycle?

Question92: Why is it important to ignore opinions and focus on facts in market analysis?