Financial Investment Ch 9

Chapter 09
Behavioral Finance and Technical Analysis

Multiple Choice Questions

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 a(n) ______ indicator.
A. fundamental
B. economic
C. technical
D. 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 ____________