CMT Level 1 Exam ( Update) An Introduction to Technical Analysis | Questions and Verified Answers| Grade A| 100% Correct

CMT Level 1 Exam ( Update) An Introduction to Technical Analysis | Questions and Verified Answers| Grade A| 100% Correct Q: When the Stochastic indicator crosses below 20, it is signaling Answer: The price is vulnerable to a reversal, but no action needs to be taken just yet. Q: Which of the following principles describes a characteristic of related cycles Answer: harmonics Q: Which of the following formations is often called a coil? Answer: Symmetrical Triangle Q: Bullish support lines on a 3-box reversal P & F chart are drawn at a _____ degree angle: Answer: 45 Q: The stock multiplication factor to adjust for a 30% stock dividend on a Point and Figure chart is: Answer: 1.3 Q: Which one of the following chart types uses more than one data point to plot a particular time interval? Answer: Candlesticks Q: __________ mean is the best choice when averaging ratios that can be either fractions or percentages: Answer: Geometric Q: . Kurtosis refers to the: Answer: Peakedness or flatness of a distribution Q: Standard deviation is calculated by taking the square root of Answer: Variance Q: If the daily returns are constant, they can be converted to annualized risk by multiplying the daily return with the square root of Answer: 252 Q: Sharpe Ratio Answer: The Sharpe ratio is calculated by dividing the mean excess return of the portfolio by the standard deviation of the excess return. In other words, this ratio measures the "reward" we can get for a particular level of variability or "risk". Q: Treynor Ratio Answer: The Treynor ratio is similar to the Sharpe ratio, but CAPM beta is used in the denominator rather than the standard deviation. This is an important difference. Since the Treynor ratio uses only the non-diversifiable risk as the denominator, it should be used for evaluating funds or assets which are being added to a portfolio which is already well diversified. Q: Information Ratio Answer: The information ratio is the "alpha" of a portfolio divided by the tracking error. In other words, the information ratio is the excess return relative to a benchmark that a manager generates divided by the extra risk that the manager takes on in order to generate that excess return. Q: Seasonality is a cycle that occurs Answer: Yearly Q: Fungibility is: Answer: Interchangeability of financial assets on identical terms Q: Three orderly components of price movement Answer: Seasonality, Cycle and Trend Q: The global business cycle as identified by the Princeton Economic Institute measures: Answer: 8.6 years Q: What is the length of the Kondratieff Wave Answer: 54 years