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Best Quality CMT Association CMT-Level-II Exam Questions
NEW QUESTION 63
Which of the following is a diversification technique in trading?
- A. Trade multiple securities in markets with high correlation
- B. All of the above
- C. Balance risk across multiple markets and trading systems
- D. Stick to a single trading system
Answer: C
NEW QUESTION 64
_______________ as a risk measure results in an estimation of a price move in either direction.
- A. Implied volatility
- B. Standard deviation
- C. Put/ call parity
- D. Plurality index
Answer: A
NEW QUESTION 65
Which of the following instances marks a single best valid buy signal with respect to the direction system for the next new trend?
- A. B
- B. C
- C. A
- D. D
Answer: D
NEW QUESTION 66
Which of the following perfectly describes the pattern of a standard broadening formation with regards to pattern analysis?
- A. The upper trend line goes upwards and must have a single peak
- B. The upper trend line goes downwards and must have two peaks, the latter higher than the former
- C. The upper trend line goes upwards and must have two peaks, the latter higher than the former
- D. The upper trend line goes upwards and must have two peaks, the latter lower than the former
Answer: D
NEW QUESTION 67
Which of the following is the MOST likely use of an oscillator in a trading system:
- A. To forecast future price levels
- B. To hedge other positions
- C. To determine position sizes
- D. As a timing tool
Answer: D
NEW QUESTION 68
Which of the following is an INCORRECT interpretation of the candlestick piercing pattern?
- A. It is preceded by a market uptrend
- B. It is a bullish reversal pattern
- C. The greater the penetration into the price levels of the prior day's real body, the greater predictive power
- D. It is the opposite of the dark cloud cover
Answer: A
NEW QUESTION 69
Which of the following is true of moving average crossovers?
- A. In a triple crossover trading system buying is signaled when the shortest term moving average crosses over one of the other moving averages
- B. Once a moving average system is optimized, it can be used for trading all markets
- C. The first crossover in a triple crossover system during an upside reversal is when the shortestterm moving average crosses above one of the other two averages
- D. It is considered bearish when a short term moving average crosses above a longer term moving average
Answer: C
NEW QUESTION 70
Which of the following applies to the interpretation of point and figure charts in analyzing futures prices?
- A. Pattern analysis is more complex than for stocks
- B. Incorporating open interest data into a point and figure chart makes this type of chart more useful for futures
- C. Only the most basic techniques are generally used such as a one box breakout
- D. Futures prices offer a greater variety of chart formations than stocks
Answer: C
NEW QUESTION 71
Which of the following the correct description of the law of percentages in the field of decision making and selection?
- A. A relative loss of 20% can be made back with a relative gain of 20%, but an absolute 20% loss don't require a 25% gain to break even
- B. A relative gain of 20% can be made back with a relative loss of 20%, but an absolute 20% loss requires a 25% gain to break even
- C. A relative loss of 20% can be made back with a relative gain of 20%, but an absolute 10% loss requires a 25% gain to break even
- D. A relative loss of 20% can be made back with a relative gain of 20%, but an absolute 20% loss requires a 25% gain to break even
Answer: D
NEW QUESTION 72
The MTA Code of Ethics applies to:
- A. Members only
- B. All of the above
- C. CMT candidates
- D. Affiliates only
Answer: B
NEW QUESTION 73
Which of the following BEST describes the rule of alternation?
- A. Price follows volume
- B. Prices alternate in Fibonacci sequences
- C. Downtrends follow uptrends
- D. Complex patterns follow simple patterns
Answer: D
NEW QUESTION 74
Which of the following is the formula for calculating RSI?
- A. RSI = 100 - (100/(1 + RS))
- B. RSI = 100 - (100/(100 + RS))
- C. RSI = 100 + (100/(1 + RS))
- D. RSI = 100 - (100/(1 X RS))
Answer: A
NEW QUESTION 75
Staying the course in a trading strategy GENERALLY entails?
- A. Most valid buy signals in trading systems occur in the opposite direction of the prevailing trend
- B. Not getting sidetracked by single, counter-trend news events
- C. Meeting margin calls
- D. Not utilizing stops
Answer: B
NEW QUESTION 76
Which of the following is NOT a basic principle of cycles?
- A. Harmonicity
- B. Synchronicity
- C. Summation
- D. Alternation
Answer: D
NEW QUESTION 77
What is the measuring objective for flags and pennants?
- A. There is a different measuring objective for each
- B. Half the distance of the preceding move from breakout to the flag or pennant
- C. The move after the pattern will be equal to the move before the pattern
- D. Flags fly at half mast and pennants are considered reversal patterns
Answer: C
NEW QUESTION 78
Which of the following asset classes as a leading indicator for the stock market?
- A. Energy
- B. Bonds
- C. Precious metal
- D. Bullion
Answer: B
NEW QUESTION 79
________ is calculated by finding the probability of loss of the current market positions based on past market movements.
- A. Value at Risk
- B. Treynor ratio
- C. Potential Risk
- D. Hindenburg Omen
Answer: A
NEW QUESTION 80
_______uses the distribution of daily trading range to create a new indicator.
- A. Money Flow Index
- B. Intraday Intensity
- C. TRIX
- D. True Strength Index
Answer: B
NEW QUESTION 81
Which of the following are true of futures volume and open interest?
- A. All of the above
- B. Open interest increases during a trending period
- C. Rising prices and declining volume/open interest indicate a pending change of direction
- D. Volume may decline but open interest builds during an accumulation phase
Answer: A
NEW QUESTION 82
What trading decision must a trader make based purely on trend line in the chart below?
- A. Hold long positions
- B. Trading decisions cannot be made by using trend lines.
- C. Close out long positions
- D. Close out short positions
Answer: A
NEW QUESTION 83
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