Module 6 - Fundamental and Technical Analysis

Question 1

_______ is a financial ratio that tells the investor how much money the company is making for every peso of sales after deducting the cost of sales from the company’s revenue.

Answer 1

Gross Profit Margin

Question 2

Assuming the company has more debt than cash, deducting cash and equivalents from the Total Financial Debt of the company would result to:

Answer 2

Net Debt

Question 3

The ______________ tries to break down the Return on Equity (ROE) into three factors to better explain both the sources of ROE as well as the relative importance of each of the sources of ROE to the profitability of the company

Answer 3

DuPont analysis

Question 4

Having profits that are ____________________ allows investors to have a clear understanding of the sources of profits and also provides insights about its sustainability in the future, thus also a big plus in doing the valuation exercise for the company

Answer 4

Visible and predictable

Question 5

Companies that are seen to have _________ earnings growth in the future are usually bought by investors at higher valuations (e.g. high P/E)

Answer 5

High

Question 6

A trend trader almost always trade in the direction of the trend. For long only markets, what should a trend trader look in the price action to signal a buy decision?

Answer 6

Higher low and higher high in the stock price

Question 7

Moving Averages are useful because it informs the trader whether the market is bullish or bearish on a stock. In a trending market, if the stock price is above the moving average, that tells the trader that the market is ___________ on that stock.

Answer 7

Bullish

Question 8

The chart pattern’s ________________ is among the bases of support and resistance levels/regions which is derived by taking the distance from certain points of a chart pattern. Support or resistance is estimated by projecting that number from the breakout point.

Answer 8

Measured move

Question 9

A ___________ wedge appears when the stock price is still making higher highs and higher lows, but the slope of the higher highs is becoming relatively flattish. This is a bearish reversal pattern that should signal a sell to the trader.

Answer 9

Rising

Question 10

A stock that is making a higher high on the stock price, but making a lower high on the RSI is said to have formed a ______________

Answer 10

Bearish RSI divergence