Chapter 15

Question 1

Placement Ratio indicates the:

Answer 1

number of bonds that were sold during the week compared to what was available for sale

Question 2

Short Interest Theory

Answer 2

Analyzes the amount of a company’s stock that has been shorted and not yet covered

Question 3

A head and shoulders bottom formation is considered a _____ indicator.

Answer 3

Bullish

Question 4

The Visible Supply figure indicates the number of municipals expected to reach the market within the next _____ days.

Answer 4

30 days

Question 5

Support level

Answer 5

The price level at which point a stock stops decreasing

Question 6

The breakout of an area of support is a _____ indicator.

Answer 6

bearish

Question 7

The Visible Supply figures and the Placement Ratio for municipals can be found on the:

Answer 7

Bond Buyer

Question 8

A large short interest is a _____ indicator.

Answer 8

bullish

Question 9

If there is a lack of liquidity in a security, the spread between the bid and asked price would be expected to:

Answer 9

widen

Question 10

An increase in odd lot selling is a _____ indicator.

Answer 10

bullish

Question 11

A head and shoulders top formation is considered a _____ indicator.

Answer 11

bearish

Question 12

An increase in odd lot buying is a _____ indicator.

Answer 12

bearish

Question 13

Resistance level

Answer 13

The price level at which point a stock stops increasing

Question 14

The _____ Theory states that small public investors are generally wrong.

Answer 14

Odd Lot

Question 15

The breakout of an area is a _____ indicator.

Answer 15

bullish

Question 16

The measure of an asset’s volatility compared to the market as a whole.

Answer 16

Beta

Question 17

The measure of an investment’s risk-adjusted performance against a benchmark index.

Answer 17

Alpha

Question 18

The overall attitude of investors as it relates to the market or specific security.

Answer 18

Market sentiment

Question 19

The trading volume that sustains an increase or decrease in prices.

Answer 19

Market momentum

Question 20

An indicator of the support behind a move in the direction of stock prices.

Answer 20

Trading volume

Question 21

Used to evaluate a stock’s volatility in the future.

Answer 21

Options volatility

Question 22

Gauges investors’ sentiment in the market.

Answer 22

Put/Call Ratio

Question 23

Reflects investors’ attitudes towards the direction the underlying market may be headed.

Answer 23

Index futures

Question 24

The number of shares that have been sold short, but not yet covered.

Answer 24

Short interest

Question 25

The Bond Buyer Municipal Bond Index is based on:

Answer 25

A 40-Bond Index

Question 26

The Bond Buyer Index is based on:

Answer 26

40 municipal bonds

Question 27

Modern Portfolio Theory

Answer 27

Portfolio management should focus on diversification among different classes of assets

Question 28

A RR should update a client’s financial condition or status:

Answer 28

When there is a change in the clients purchases or sales that might indicate a different financial situation