CMT-Level-II Exam Questions Get Updated [2021] with Correct Answers
Practice CMT-Level-II Questions With Certification guide Q&A from Training Expert Lead1Pass
NEW QUESTION 137
Which of the following would normally be considered a sentiment indicator that is most useful to traders?
- A. Insider buying
- B. Price/earnings ratio
- C. Corporate buy backs
- D. Put/call ratio
Answer: D
NEW QUESTION 138
Which of the following is a CORRECT interpretation of the shooting star pattern?
- A. The color of the real body is of utmost importance to its significance
- B. It is even more bearish than the gravestone doji candle
- C. Shooting stars in charts, as in life, are omens of good fortune
- D. It is a bearish reversal pattern
Answer: D
NEW QUESTION 139
What is the measuring objective for flags and pennants?
- A. There is a different measuring objective for each
- B. Flags fly at half mast and pennants are considered reversal patterns
- C. Half the distance of the preceding move from breakout to the flag or pennant
- D. The move after the pattern will be equal to the move before the pattern
Answer: D
NEW QUESTION 140
Beta measures:
- A. how much an individual stock's return is related to the market return.
- B. the relation between a portfolio's volatility and market volatility.
- C. how much an individual stock's volatility is related to the market volatility.
- D. the relation between a portfolio's return and market return.
Answer: A
NEW QUESTION 141
Which of the following is a true statement according to Elliott Wave Theory?
- A. The two types of simple corrections are zigzags and flats
- B. Corrections always take place in five wave patterns
- C. A trend divides into three waves in the direction of the next longer trend
- D. A complete bull market cycle is made up of eight waves, three waves up followed by five waves down
Answer: A
NEW QUESTION 142
A trend based trading system where the trend is the slope of a straight line found using a least squares regression:
- A. N-day breakout
- B. Linear regression slope
- C. Point and figure
- D. Simple moving average
Answer: B
NEW QUESTION 143
Which of the following would be a valid trading interpretation of top chart patterns?
- A. Find a market with a long consolidating base and high volatility
- B. Sell when there is a major price retrenchment in a bull market
- C. Sell whenever a major support level is tested but not breached
- D. Liquidate positions at prior major resistance points, top formations or the break of a major support line
Answer: D
NEW QUESTION 144
When using the Bar/Candle method to portray volume what is the relationship defined between price and volume using this method?
- A. It has no relationship between price and volume
- B. It has an indirect relationship between price and volume
- C. It has a direct relationship between price and volume
- D. The price is dependent on the volume
Answer: A
NEW QUESTION 145
What of the following could be utilized in a computerized trading system to improve the performance of Wilder's Parabolic System?
- A. Trend lines
- B. Average divergence index
- C. Stops
- D. Directional movement index
Answer: D
NEW QUESTION 146
Which of the following best helps quantify the risk of a trading system?
- A. Length of Average Winning Trade
- B. Longest Flat Time
- C. Maximum Favorable Excursions
- D. Maximum Cumulative Drawdown
Answer: D
NEW QUESTION 147
Which of the following is true of the separating lines pattern?
- A. It is a reversal pattern
- B. The opening price of the second candle equals the opening price of the first candle
- C. The two candles have the same color
- D. The top of the upper shadow of one candle is at the same price as the bottom of the lower shadow of the other candle
Answer: B
NEW QUESTION 148
Interpret price action in the chart below, combined with takeaways from the SPX New High-New Low index:
- A. Divergence between price action and indicator; suggests exiting of long positions.
- B. Can initiate long positions at current price level; breadth bottomed out at the same level as the pullback in October 2014.
- C. Confirmation between price action and indicator; the ongoing pullback can be bought.
- D. Divergence between price action and indicator; can initiate shorts at current levels.
Answer: A
NEW QUESTION 149
A morning star pattern is typically:
- A. A top reversal pattern consisting of three candles
- B. A bottom reversal pattern consisting of three candles
- C. A continuation consisting of at least five candles
- D. A very small pattern consisting of two candles that is infrequently seen
Answer: B
NEW QUESTION 150
Which of the following is true of contrary opinion as a technical analysis technique?
- A. Contrary opinion is more useful in deciding when to exit positions than as a timing tool
- B. Once all long positions have been set, there is diminishing influence by the bulls
- C. Contrary opinion can be used as the sole decision source in entering into new trading positions
- D. Contrarians trade against the consensus even when it is within a normal range
Answer: B
NEW QUESTION 151
What is the proper use of long-term charts versus daily price charts?
- A. Long-term charts allow for a better assessment of the price trend
- B. Daily price charts allow for a better assessment of the price trend
- C. Long-term charts are more useful for making trading decisions
- D. Daily price charts allow for a thorough trend analysis
Answer: A
NEW QUESTION 152
According to the MTA Code of Ethics, what prohibitions MUST be adhered to after making a buy or sell recommendation?
- A. Insider trading activity is the subject of SEC regulations, therefore the MTA Code of Ethics is silent on this issue
- B. Analysts may effect trades for their own account even if their employer has not had time to act on their recommendation
- C. Allow adequate time for clients to act on recommendations before the analyst acts on the recommendation
- D. Analysts must give clients and their employer adequate time to trade, but the analyst's family members are under no such restriction
Answer: C
NEW QUESTION 153
A system in which the investor must be able to withstand a long series of losses.
- A. Pyramiding
- B. Parabolic System
- C. Martingale Betting System
- D. Directional Move System
Answer: C
NEW QUESTION 154
Which of the following is a CORRECT guideline in pyramiding trades positions?
- A. Add to losing positions, as a form of dollar cost averaging
- B. Adjust protective stops to the breakeven point
- C. Take profits on winning positions
- D. Each successive layer should be larger than the prior layer
Answer: B
NEW QUESTION 155
When the stocks above their 50-day MA indicator reaches an extreme-above _____ or below _____ and then moves away from that level, it shows that the intermediate-term trend has reached a likely turning point.
- A. 95%, 5%
- B. 95%, 25%
- C. 75%, 15%
- D. 75%, 25%
Answer: D
NEW QUESTION 156
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