Financial Institutions Instruments and Markets 7Th Edition Viney Test Bank Full Chapter PDF

Financial Institutions Instruments and
Markets 7th Edition Viney Test Bank

Visit to download the full and correct content document: https://testbankdeal.com/dow
nload/financial-institutions-instruments-and-markets-7th-edition-viney-test-bank/
Chapter 07 - Test Bank
Multiple Choice Questions
1. If investors _______ a company's shares, the _______ supply is likely to lead to a _______ in the share
price.
A. buy; increased; rise

B. buy; decreased; fall
C. sell; increased; fall
D. sell; decreased; rise
2. If a company's shares are expected to perform better than other companies in the same industry, there will
be _______ for the company shares and a ____ in the share price.
A. increased demand; rise

B. decreased demand; rise
C. increased supply; fall
D. decreased supply; fall
3. The approach that seeks to identify factors that are likely to influence the growth rate and future profits of a
company is called:
A. economic analysis.
B. factor analysis.
C. fundamental analysis.
D. technical analysis.
4. When an investor makes their investment decision based on a company's accounting ratios, they are using:
B. factor analysis.
5. The investment approach that focuses on the underlying determinants of future profitability rather than on
past price movements of a company's stock is:
A. credit analysis.
B. fundamental analysis.
C. systems analysis.
6. The investment approach that evaluates and interprets past share price movements is:
A. credit analysis.
B. technical analysis.
D. systematic analysis.
7. In relation to fundamental analysis, which of the following is NOT a problem associated with rapid,
unsustainable economic growth?
A. GDP growth between 1 and 2%

B. Current account of the balance of payments worsens
C. Pressure on wage growth falls
D. Inflationary pressures increase
8. The portion of the overall economy defined by the nature of a company's operations is called the:
A. economic component.
B. company component.
C. industry sector.
D. country sector.
9. The net record of a country's international earnings less its international payments is its:
A. capital account.
B. current account.
C. Gross Domestic Product.
D. gross national income.
10. In relation to a country's economy, the more a country imports and the worse the current account becomes,
the:
A. more the currency increases.

B. lower interest rates fall.
C. lower foreign debt becomes.
D. higher foreign debt becomes.
11. In relation to a country's economy, if a country's current account deteriorates, the government is likely to:
A. loosen monetary policy.

B. increase government expenditure.
C. tighten interest rates.
D. lower taxes.
12. Foreign exchange risk is best described as the:
A. variability in the current account balance of the balance of payments.

B. cost of one currency in terms of another.
C. risk that the price of one currency relative to another currency will change.
D. variability of domestic and international interest rates.
13. Writing down the value of a capital asset, reported as an expense, is called:
A. downgrading.
B. depreciation.
C. documentation.
D. reduction.
14. If there were an appreciation of the exchange rate of a local currency against the USD, then _____ from
_____ sales would be _____ than if the exchange rate had remained constant.
A. profits; increased exports; less

B. losses; increased exports; less
C. profits; increased exports; more
D. losses; decreased imports; more
15. Investment analysts use a number of approaches in the analysis of fundamentals that may affect share
prices. Which of the following statements in relation to the bottom-up approach to share price analysis is
MOST correct? The bottom-up approach:
A. identifies the level of systematic risk within industry sectors.

B. is applied to select specific firms from within desired industry sectors.
C. indicates a well-diversified portfolio that eliminates unsystematic risk.
D. provides investment indicators based on forecast financial ratios.
prices. Which of the following statements in relation to the top-down approach to share price analysis is
MOST correct? The top-down approach:
A. identifies specific firms to include in an investment portfolio.

B. provides a measure of the level of unsystematic risk in the market.
C. compares the performance of firms through financial ratio analysis.
D. identifies future economic factors that may impact on industry sector performance.
17. Some of the factors that are used by analysts using the top-down approach in the analysis of fundamentals
affecting share prices are:
A. exchange rates.
B. interest rates.
C. rate of growth in international economies.
D. all of the given answers.
18. Firm-specific financial indicators used in fundamental analysis top-down approach are:
A. interest rates.
B. consumer confidence.
C. return on assets.
D. business cycle.
19. Which of the following is NOT a problem that may be associated with rapid, unsustainable growth in an
economy?
A. An upward pressure on wages

B. An increase in inflationary pressures
C. An improvement in the current account of the balance of payments
D. A rise in interest rates
20 An investor seeks to compare the financial characteristics of four companies that are investment possibilities.
. Based solely on the data provided in the following ratios, which company would provide the lowest
investment risk?
Ratio Company A Company B Company C Company D

Current 1.80 1.55 1.85 1.10
Proprietorship 65.00% 45.75% 71.00% 31.50%
EBIT/long-term funds 18.50% 14.60% 17.00% 15.50%
Return on shareholders' funds 14.50% 11.50% 14.50% 12.75%
Debt/gross cash flow 4.91 (years) 2.80 (years) 2.91 (years) 3.85 (years)
Interest cover 3.00 (times) 2.10 (times) 3.10 (times) 2.30 (times)
P/E 19.50 (times) 7.70 (times) 5.21 (times) 12.10 (times)
NTA/price 1.02 (times) 0.96 times) 1.00 (times) 0.99 (times)
A. Company A
B. Company B
C. Company C
D. Company D
21. The greater the degree of systematic risk, the:
A. higher the expected share price.

B. higher the expected rate of return.
C. lower the expected return on a share.
D. closer a share's beta will be to 1.
22. The lower the degree of unsystematic risk, the:
A. higher the diversification of a share portfolio.

B. lower a share's beta coefficient.
C. higher a share's beta coefficient.
D. lower the diversification of a share portfolio.
23. An investor who buys a large number of shares from different companies and from many different
industries will:
A. abolish systematic risk.

B. minimise unsystematic risk.
C. minimise credit risk.
D. minimise price risk.
24. According to modern portfolio theory, the _______ the degree of systematic risk, the _______ should be
the expected return.
A. smaller; greater.
B. greater; greater.
C. smaller; smaller.
D. greater; smaller.
25. The investment approach that focuses more on past price movements of a company's stock than on the
underlying determinants of future profitability is:
A. credit analysis.
26. When investors use past share price movements to make their investment decisions, they are using:
B. factor analysis.
27. Compared with technical analysis, fundamental analysis considers the:
A. fundamentals of price movements only.

B. fundamentals of companies only.
C. factors that influence a company only.
D. factors that influence a company and the overall market.
28. Compared with fundamental analysis, technical analysis focuses on:
A. accounting ratios.
B. forecasting a company's future profitability.
C. forecasting a company's technical ratios.
D. share price movements.
29. An important belief underlying the use of technical analysis techniques is that:
A. security prices react rapidly to new information.

B. security prices react gradually to new information.
C. there are sufficient investors in the market to provide enough liquidity to keep price changes relatively
small.
D. all investors have immediate and relatively low-cost access to information.
30. Technical analysts basically believe that security prices:
A. react rapidly to new information, and share market prices are determined by the interaction of demand
and supply.
B. react rapidly to new information, and security dealers provide liquidity.
C. react gradually to new information, and market prices are determined by the interaction of supply and
demand.
D. react gradually to new information, and security dealers provide liquidity.
31. An alternative approach to forecasting the behaviour of share prices is technical analysis. Which of the
following statements in relation to the approach taken by technical analysts is incorrect?
A. As a price pattern emerges, it is assumed that the historical pattern will re-emerge in full.
B. The stock markets are, at times, dominated by mass psychology.
C. Historical price patterns are of little use in forecasting future price movements.
D. Analysts typically adopt either a ‘technical' or a ‘fundamental' approach.
32. _______ is a mathematical technique used by technical analysts to clearly reveal all the trends in a price
series.
A. Averaging
B. Moving average
C. Price averaging
D. Series averaging
33. A graph of average price series constructed over time is called a:
A. chart.
B. average time series.
C. moving average.
D. technical line.
34. In technical analysis, when the lower points of a rising price series are connected this is a:
A. downward trend line.

B. moving average.
C. upward trend line.
D. weighted moving average.
35. Daily share-price data is given over a seven-day period for a company. Calculate the five-day moving
average over the period.
14 June: $6.75
15 June: $6.80
16 June: $6.94
17 June: $6.58
18 June: $6.23
21 June: $5.95
22 June: $5.80
A. $6.23; $5.95; $5.80

B. $6.23; $6.50; $6.44
C. $6.66; $6.50; $6.30
D. $6.66; $6.54; $6.44
36. When the share price series breaks through the moving average line from below, a technical analyst would
probably suggest it is a good time to:
A. buy the share.

B. sell the share.
C. hold the share.
D. short the share.
37. An analyst constructs a moving average line in order to:
A. forecast future cash earnings of a company.

B. analyse support and resistance lines.
C. smooth out erratic price movements.
D. work out the efficiency of the market.
38. When the share price series breaks through a flattening moving average line from above, a technical analyst
would probably suggest it is a good time to:
A. buy the share.

B. sell the share.
C. hold the share.
D. short the share.
39. Once the actual price and moving average (MA) series are plotted on the same graph, buy and sell signals
are generated. So:
A. buy when the actual price series cuts the MA from below, especially if the MA has been flat or in a
gentle decline.
B. sell when the MA series is rising strongly and the price series cuts or touches the MA from above, but
then moves back above the MA after only a few observations.
C. sell when the MA flattens or declines after a steady rise, and the price series cuts the MA from above.
D. buy when the MA series is rising strongly and the price series cuts or touches the MA from above, but
then moves back above the MA after only a few observations.
40. In relation to technical analysis, a support level is:
A. a level beyond which the market is unlikely to rise.

B. a level below which the market is unlikely to fall.
C. an equilibrium price level supported by earnings and cash flows.
D. the complete cycle of a market wave.
41. In relation to technical analysis, what is the level above which the market finds it difficult to rise?
A. Trend channel
B. Resistance level
C. Support level
D. None of the given answers are correct
42. In technical analysis, a price level below which the market price is temporarily unlikely to fall is a:
A. trend channel.
B. resistance line.
C. support line.
D. trend line.
43. In technical analysis, a price level below which the market price is temporarily unlikely to rise is a:
A. trend channel.
B. resistance line.
C. support line.
D. trend line.
44. For technical analysts, the pattern formed by a series of price fluctuations characterised by rising bottoms
and horizontal tops is a/an:
A. ascending triangle.
B. symmetrical triangle.
C. descending triangle.
D. a pennant.
45. For technical analysts, the pattern formed by a series of price fluctuations composed with each top and
bottom smaller than its predecessor and with transaction volumes usually diminishing is a/an:
D. pole.
46. For technical analysts, the pattern formed by three successive rallies with the second rally being greater
than the first or third, is called a:
A. symmetrical triangle.
B. head and shoulder pattern.
C. breakout.
D. triple top.
47. A support/resistance pattern plotted by chartists in the stock markets is the rectangle, which consists of
sideways price fluctuations contained within horizontal support and resistance levels. Which of the
following statements in relation to indicators given by support and resistance rectangles is incorrect?
A. Rectangles tend to be characterised by increasing volumes, except for a few days before the breakout
when there are strong decreases in volumes of trade in the share(s).
B. If the last bottom does not touch the support level (beginning the formation of an ascending triangle) and
if prices then rise rapidly on increasing volume, it is likely that there will be a topside breakout.
C. If the tops fail to reach resistance levels, beginning the formation of a descending triangle, a downside
breakout is likely.
D. When a break occurs from a rectangle, the extent of the breakout is likely to equal the height of the price
rectangle.
48. In relation to charting, an upward trend line connects the _______ points of a _______ price series, while a
downward trend connects the _______ points of a _______ price series.
A. upper; rising; higher; falling

B. lower; rising; higher; falling
C. upper; falling; lower; rising
D. lower; falling; upper; rising
49. The Elliot wave theory maintains that the bullish behaviour of the share market can be explained as:
A. a series of medium-term and long-term waves.

B. a series of long-term waves upwards, and short-term waves downwards.
C. a series of three major waves upwards, followed by two major waves downwards.
D. none of the given answers.
50. In relation to share trading, buy and sell orders automatically triggered by rules entered into a computer
program are called:
A. high frequency trading.

B. intraday trading.
C. program trading.
D. flash trading.
51. In relation to share trading, a dedicated system that operates within an exchange allowing some institutional
investors to place large buy or sell orders without having to disclose the whole trade to the exchange are:

C. program trading.
D. dark pools.
52. In relation to stock exchanges, the term ‘flash trading' refers to:
A. applications of high-speed supercomputers that can place thousands of orders in seconds and then
immediately cancel them.
B. some institutional investors being able to place large buy orders without having to disclose the whole
trade to the exchange.
C. pennants and flags patterns in very fast moving markets.
D. the trades of certain institutional investors that receive information from a stock exchange of incoming
orders before other traders.
53. Program trading:
A. is the most likely reason there was a stock market crash in October 1987.
B. occurs only in over-the-counter markets.
C. refers to computer-generated orders to buy or sell many shares at the same time.
D. has been abolished by order of the ASX.
54. One of the theories on the determination of, and change in the value of, shares and other securities is the
random walk hypothesis. Which of the following statements in relation to the random walk hypothesis is
correct?
A. The trend of new information into the market may be consistently good or consistently bad over time.
B. If the price of a share rose in one period, there is a higher probability that it will rise again in the next
period.
C. Share price reflects the share's intrinsic value, based on the latest information set relevant to current and
future prospects.
D. The history of previous price movements contains valuable information on likely future price
movements.
55. If a share price falls on four consecutive days of trading, share prices:
A. cannot be following a random walk

B. can still be following a random walk
C. are almost certain to decrease the next day
D. are almost certain to increase the next day
56. Which of the following statements regarding an efficient capital market is correct?
A. All securities that investors would like to invest in are listed.

B. All transactions are closed out and settled within two days.
C. Current prices reflect all current information.
D. The lowest interest rates are offered.
57. In an efficient market:
A. security prices are seldom far above or below their justified level.
B. share prices react quickly to new information.
C. investors will not make superior returns consistently.
D. All of the given answers are correct.
58. The weak form of the efficient market hypothesis asserts that:
A. the change in future share prices cannot be predicted from past share prices.
B. share prices adjust rapidly to new information contained in past prices or past data.
C. technical analysts cannot be expected to outperform the market.
D. all of the given answers are correct.
59. If the weak form of the efficient market hypothesis holds:
A. share prices follow a random walk.

B. share prices reflect all information contained in past prices.
C. technical analysis is useless.
60. Strategies based on technical analysis are most likely to be profitable in a market that is regarded as:
A. following a random walk.

B. semi-strong efficient.
C. not strong-form efficient.
D. not weak-form efficient.
61. The weak form of the efficient market hypothesis denies the use of:
A. technical analysis, but supports fundamental analysis as valid.

B. fundamental analysis, but supports technical analysis as valid.
C. both technical analysis and fundamental analysis.
D. technical analysis, but is silent on the possibility of successful fundamental analysis.
62. At which level of market efficiency does the efficient market hypothesis support the technical analysis
approach to future share price determination?
A. Weak-form efficiency
B. Semi-strong form efficiency
C. Strong-form efficiency
D. None of the given answers
63. The semi-strong form of the efficient market hypothesis states that:
A. future share prices are predictable.

B. all available information is reflected in the price of securities.
C. security prices reflect all publicly available information.
D. None of the given choices are correct.
64. When investors cannot make superior profits on a continual basis based on past prices, public or private
information, the market is said to be:
A. weak-form efficient.
B. semi-strong form efficient.
C. strong-form efficient.
D. fundamentally efficient.
65. The strong form of the efficient market hypothesis states that:
A. security prices reflect all publicly available information.

B. major market events can be predicted using publicly available information.
C. insider information contains no special advantage.
D. future prices are predictable.
66. Which group of investors is able to earn consistent superior profits if the financial markets are strong-form
efficient?
A. Only fundamental analysts will be able to profit

B. Only technical analysts will be able to profit
C. Only specialists, analysts and insiders in the company will be able to profit
D. No one will be able to sustain superior profits
67. An investor finds that for a particular group of shares, large positive price changes are always followed by
large negative price changes. This finding violates:
A. the strong form of the efficient market hypothesis.

B. the semi-strong form of the efficient market hypothesis.
C. the weak form of the efficient market hypothesis.
D. none of the given choices.
68. If you believe that share prices reflect all information that can be derived from examining the market
trading data such as the history of past share prices, which form of efficient market hypothesis do you
believe in?
A. Weak.
B. Semi-strong.
C. Strong.
D. Informational.
69. If you believe that share prices reflect all relevant information, including publicly available information,
which form of the efficient market hypothesis do you believe in?
A. Weak.
B. Semi-strong.
C. Strong.
D. Informational.
70. If you believe that share prices reflect all relevant information including information that is available only
to insiders, which form of the efficient market hypothesis do you believe in?
A. Weak.
B. Semi-strong.
C. Strong.
D. Informational.
71. Proponents of the efficient market hypothesis assert that technical analysts:
A. should focus on resistance levels.

B. should focus on relative strength.
C. should focus on support levels.
D. are wasting their time and money.
72. When new information becomes public in the market, evidence suggests that:
A. transaction costs will erase any benefit of trading on the new information.
B. insiders will be the only investors to gain.
C. it takes at least three trading days for share prices to adjust.
D. share prices adjust rapidly to the new information.
73. It may be argued that share prices on the Australian Securities Exchange (ASX) reflect all publicly
available, relevant information regarding listed companies, and therefore superior profits cannot be made
by an investor using publicly available information. Based on the above contention, which of the following
statements best describes the informational efficiency of the ASX?
A. Strong-form efficiency.
B. Semi-strong form efficiency.
C. Weak-form efficiency.
D. Random walk efficiency.
74. Research indicates that the correlation coefficient between successive days' share price changes is:
A. quite close to +1.

B. quite close to zero.
C. quite close to –1.
D. directly related to the share's beta.
75. If share prices appear to follow a random walk:
A. selecting shares for portfolios is irrelevant.

B. investment analysts are unimportant.
C. successive share price changes are unpredictable.
D. it is impossible to know when to buy shares.
76. Research of actively managed portfolios, managed by professional portfolio managers:
A. indicates that one should not randomly select managed portfolios managed by professional portfolio
managers.
B. indicates that historical performance is a good indicator of future performance.
C. indicates that professional management provides investors with superior market returns.
D. indicates the majority of professional portfolio managers outperform the market.
77. Which of the following statements is correct?
A. If the share market follows a random walk, price changes should be highly correlated.
B. A random walk for share price changes is inconsistent with observed patterns in price changes.
C. If the share market is weak-form efficient, the share prices follow a random walk
78. In relation to behavioural finance, if an investor is influenced to follow other investors into certain
investment opportunities, this is called:
A. trading noise.
B. herding instinct.
C. framing behaviour.
D. disposition effect.
79. In relation to behavioural finance, if an investor is influenced by the manner in which an investment
opportunity is presented this is called:
A. trading noise.
80. In relation to behavioural finance, if investors do not seek to maximise returns on investments but are quite
willing to accept a lesser outcome or return, it is called:
A. trading noise.
D. heuristic behaviour.
81. Consider the following five statements:

i. Technical analysts rely on very sophisticated technical models of the macroeconomic environment.
ii. Since all chartists are confronted with identical share price data, they should identify very similar
patterns and generate identical buy and sell signals from the data.
iii. A chartist will draw resistance levels at higher share price levels where an increase in supply halts price
increases.
iv. Chartists will draw support lines at lower price levels where an increase in demand halts a price fall.
v. The random walk hypothesis, as applied to share price movements, implies that the examination of past
price movements yields no useful information on the course of future price movements.
How many of these statements are true and how many are false?
A. 4 statements are true and 1 is false.

B. 3 statements are true and 2 are false.
C. 2 statements are true and 3 are false.
D. 1 statement is true and 4 are false.
True / False Questions

82. When investors become dissatisfied with a company share and sell their shares, the increased supply of that
company's shares is likely to result in a drop of its share price.
True False
83. Fundamental analysis top-down approach considers how the directors of the company affect its share
performance.
True False
84. The bottom-up approach to fundamental analysis considers the impact of forecast changes in systematic
market variables.
True False
85. The rate of growth in major international economies can have a strong impact on expected performance of
local companies within a domestic economy.
True False
86. Historical growth trends in developed countries suggest sustainable long-term growth is in the range of 3
and 4% per annum.
True False
87. High levels of economic growth in developing countries may not be sustainable in the long term and may
lead to depreciation of those countries' exchange rates and rises in interest rates.
True False
88. With the top-down approach to fundamental analysis, the balance of payments current account deficit is not
considered because it is a country factor.
True False
89. Firms that conduct business in a country's domestic market may be affected by a fall in the local exchange
rate that leads to an increase in the rate of inflation.
True False
90. A limitation of fundamental analysis is that forecasting using fundamentals can suggest the market is
overvalued but does not forecast the timing of the downturn.
True False
91. When the moving average (MA) series is rising strongly and the share price series cuts or touches the MA
from below, this represents a sell signal for technical analysts.
True False
Short Answer Questions

92. Why should an investor consider the issue of interest rates when analysing share investments? Explain the
impact a change in interest rates might have on the performance of a corporation and its share price.
93. Compare the two main approaches to fundamental analysis: top-down and bottom-up.
94. What is a moving average model? Explain how it is used in technical analysis.
95. Charting is a type of technical analysis. Explain the process in relation to forecasting share price
movements.
96. What is program trading in relation to the share market? Discuss any impact on share price movements.
Chapter 07 - Test Bank Key
Multiple Choice Questions
1. If investors _______ a company's shares, the _______ supply is likely to lead to a _______ in the share
price.
A. buy; increased; rise

B. buy; decreased; fall
C. sell; increased; fall
D. sell; decreased; rise
Difficulty: Easy
Est time: <1 minute
Learning Objective: 07-01 Identify and interpret economic variables that impact on share price movements within the context of the top-down approach to fundamental
analysis.
Section: Introduction
2. If a company's shares are expected to perform better than other companies in the same industry, there
will be _______ for the company shares and a ____ in the share price.
A. increased demand; rise

B. decreased demand; rise
C. increased supply; fall
D. decreased supply; fall
Difficulty: Easy
Est time: <1 minute
analysis.
3. The approach that seeks to identify factors that are likely to influence the growth rate and future profits
of a company is called:
B. factor analysis.
Difficulty: Easy
Est time: <1 minute
analysis.
4. When an investor makes their investment decision based on a company's accounting ratios, they are
using:
B. factor analysis.
Difficulty: Easy
Est time: <1 minute
analysis.
5. The investment approach that focuses on the underlying determinants of future profitability rather than
on past price movements of a company's stock is:
A. credit analysis.
Difficulty: Easy
Est time: <1 minute
analysis.
6. The investment approach that evaluates and interprets past share price movements is:
A. credit analysis.
B. technical analysis.
D. systematic analysis.
Difficulty: Easy
Est time: <1 minute
analysis.
Section: 7.1 Fundamental analysis: the top-down approach
7. In relation to fundamental analysis, which of the following is NOT a problem associated with rapid,
unsustainable economic growth?
A. GDP growth between 1 and 2%

B. Current account of the balance of payments worsens
C. Pressure on wage growth falls
D. Inflationary pressures increase
Difficulty: Easy
Est time: <1 minute
analysis.
8. The portion of the overall economy defined by the nature of a company's operations is called the:
A. economic component.
B. company component.
C. industry sector.
D. country sector.
Difficulty: Easy
Est time: <1 minute
analysis.
9. The net record of a country's international earnings less its international payments is its:
A. capital account.
B. current account.
C. Gross Domestic Product.
D. gross national income.
Difficulty: Medium
Est time: <1 minute
analysis.
10. In relation to a country's economy, the more a country imports and the worse the current account
becomes, the:
A. more the currency increases.

B. lower interest rates fall.
C. lower foreign debt becomes.
D. higher foreign debt becomes.
Difficulty: Medium
Est time: <1 minute
analysis.
11. In relation to a country's economy, if a country's current account deteriorates, the government is likely
to:
A. loosen monetary policy.

B. increase government expenditure.
C. tighten interest rates.
D. lower taxes.
Difficulty: Medium
Est time: <1 minute
analysis.
12. Foreign exchange risk is best described as the:
A. variability in the current account balance of the balance of payments.

B. cost of one currency in terms of another.
C. risk that the price of one currency relative to another currency will change.
D. variability of domestic and international interest rates.
Difficulty: Medium
Est time: <1 minute
analysis.
13. Writing down the value of a capital asset, reported as an expense, is called:
A. downgrading.
B. depreciation.
C. documentation.
D. reduction.
Difficulty: Easy
Est time: <1 minute
analysis.
14. If there were an appreciation of the exchange rate of a local currency against the USD, then _____ from
_____ sales would be _____ than if the exchange rate had remained constant.
A. profits; increased exports; less

B. losses; increased exports; less
C. profits; increased exports; more
D. losses; decreased imports; more
Difficulty: Easy
Est time: <1 minute
analysis.
prices. Which of the following statements in relation to the bottom-up approach to share price analysis
is MOST correct? The bottom-up approach:
A. identifies the level of systematic risk within industry sectors.

B. is applied to select specific firms from within desired industry sectors.
C. indicates a well-diversified portfolio that eliminates unsystematic risk.
D. provides investment indicators based on forecast financial ratios.
Difficulty: Medium
Est time: <1 minute
analysis.
prices. Which of the following statements in relation to the top-down approach to share price analysis is
MOST correct? The top-down approach:
A. identifies specific firms to include in an investment portfolio.

B. provides a measure of the level of unsystematic risk in the market.
C. compares the performance of firms through financial ratio analysis.
D. identifies future economic factors that may impact on industry sector performance.
Difficulty: Medium
Est time: <1 minute
analysis.
17. Some of the factors that are used by analysts using the top-down approach in the analysis of
fundamentals affecting share prices are:
A. exchange rates.
B. interest rates.
C. rate of growth in international economies.
D. all of the given answers.
Difficulty: Medium
Est time: <1 minute
analysis.
18. Firm-specific financial indicators used in fundamental analysis top-down approach are:
A. interest rates.
B. consumer confidence.
C. return on assets.
D. business cycle.
Difficulty: Easy
Est time: <1 minute
analysis.
19. Which of the following is NOT a problem that may be associated with rapid, unsustainable growth in an
economy?
A. An upward pressure on wages

B. An increase in inflationary pressures
C. An improvement in the current account of the balance of payments
D. A rise in interest rates
Difficulty: Medium
Est time: <1 minute
analysis.
20 An investor seeks to compare the financial characteristics of four companies that are investment possibilities.
. Based solely on the data provided in the following ratios, which company would provide the lowest
investment risk?
Ratio Company A Company B Company C Company D

Current 1.80 1.55 1.85 1.10
Proprietorship 65.00% 45.75% 71.00% 31.50%
EBIT/long-term funds 18.50% 14.60% 17.00% 15.50%
Return on shareholders' funds 14.50% 11.50% 14.50% 12.75%
Debt/gross cash flow 4.91 (years) 2.80 (years) 2.91 (years) 3.85 (years)
Interest cover 3.00 (times) 2.10 (times) 3.10 (times) 2.30 (times)
P/E 19.50 (times) 7.70 (times) 5.21 (times) 12.10 (times)
NTA/price 1.02 (times) 0.96 times) 1.00 (times) 0.99 (times)
A. Company A
B. Company B
C. Company C
D. Company D
Difficulty: Medium
Est time: <1 minute
Learning Objective: 07-02 Evaluate and apply the principles of the bottom-up approach to fundamental analysis, in particular the analysis of the financial and
operational performance of a corporation.
Section: 7.2 Fundamental analysis: the bottom-up approach
21. The greater the degree of systematic risk, the:
A. higher the expected share price.

B. higher the expected rate of return.
C. lower the expected return on a share.
D. closer a share's beta will be to 1.
Difficulty: Medium
Est time: <1 minute
22. The lower the degree of unsystematic risk, the:
A. higher the diversification of a share portfolio.

B. lower a share's beta coefficient.
C. higher a share's beta coefficient.
D. lower the diversification of a share portfolio.
Difficulty: Medium
Est time: <1 minute
23. An investor who buys a large number of shares from different companies and from many different
industries will:
A. abolish systematic risk.

B. minimise unsystematic risk.
C. minimise credit risk.
D. minimise price risk.
Difficulty: Easy
Est time: <1 minute
24. According to modern portfolio theory, the _______ the degree of systematic risk, the _______ should
be the expected return.
A. smaller; greater.
B. greater; greater.
C. smaller; smaller.
D. greater; smaller.
Difficulty: Easy
Est time: <1 minute
25. The investment approach that focuses more on past price movements of a company's stock than on the
underlying determinants of future profitability is:
A. credit analysis.
Difficulty: Easy
Est time: <1 minute
Learning Objective: 07-03 Describe and apply technical analysis to forecasting movements in share prices.
Section: 7.3 Technical analysis
26. When investors use past share price movements to make their investment decisions, they are using:
B. factor analysis.
Difficulty: Easy
Est time: <1 minute
27. Compared with technical analysis, fundamental analysis considers the:
A. fundamentals of price movements only.

B. fundamentals of companies only.
C. factors that influence a company only.
D. factors that influence a company and the overall market.
Difficulty: Easy
Est time: <1 minute
28. Compared with fundamental analysis, technical analysis focuses on:
A. accounting ratios.
B. forecasting a company's future profitability.
C. forecasting a company's technical ratios.
D. share price movements.
Difficulty: Easy
Est time: <1 minute
29. An important belief underlying the use of technical analysis techniques is that:
A. security prices react rapidly to new information.

B. security prices react gradually to new information.
C. there are sufficient investors in the market to provide enough liquidity to keep price changes
relatively small.
D. all investors have immediate and relatively low-cost access to information.
Difficulty: Medium
Est time: <1 minute
30. Technical analysts basically believe that security prices:
A. react rapidly to new information, and share market prices are determined by the interaction of
demand and supply.
B. react rapidly to new information, and security dealers provide liquidity.
C. react gradually to new information, and market prices are determined by the interaction of supply
and demand.
D. react gradually to new information, and security dealers provide liquidity.
Difficulty: Medium
Est time: <1 minute
31. An alternative approach to forecasting the behaviour of share prices is technical analysis. Which of the
following statements in relation to the approach taken by technical analysts is incorrect?
A. As a price pattern emerges, it is assumed that the historical pattern will re-emerge in full.
B. The stock markets are, at times, dominated by mass psychology.
C. Historical price patterns are of little use in forecasting future price movements.
D. Analysts typically adopt either a ‘technical' or a ‘fundamental' approach.
Difficulty: Easy
Est time: <1 minute
32. _______ is a mathematical technique used by technical analysts to clearly reveal all the trends in a price
series.
A. Averaging
B. Moving average
C. Price averaging
D. Series averaging
Difficulty: Easy
Est time: <1 minute
33. A graph of average price series constructed over time is called a:
A. chart.
B. average time series.
C. moving average.
D. technical line.
Difficulty: Easy
Est time: <1 minute
34. In technical analysis, when the lower points of a rising price series are connected this is a:
A. downward trend line.

B. moving average.
C. upward trend line.
D. weighted moving average.
Difficulty: Easy
Est time: <1 minute
35. Daily share-price data is given over a seven-day period for a company. Calculate the five-day moving
average over the period.
14 June: $6.75
15 June: $6.80
16 June: $6.94
17 June: $6.58
18 June: $6.23
21 June: $5.95
22 June: $5.80
A. $6.23; $5.95; $5.80

B. $6.23; $6.50; $6.44
C. $6.66; $6.50; $6.30
D. $6.66; $6.54; $6.44
Difficulty: Hard
Est time: <1 minute
36. When the share price series breaks through the moving average line from below, a technical analyst
would probably suggest it is a good time to:
A. buy the share.

B. sell the share.
C. hold the share.
D. short the share.
Difficulty: Medium
Est time: <1 minute
37. An analyst constructs a moving average line in order to:
A. forecast future cash earnings of a company.

B. analyse support and resistance lines.
C. smooth out erratic price movements.
D. work out the efficiency of the market.
Difficulty: Easy
Est time: <1 minute
38. When the share price series breaks through a flattening moving average line from above, a technical
analyst would probably suggest it is a good time to:
A. buy the share.

B. sell the share.
C. hold the share.
D. short the share.
Difficulty: Medium
Est time: <1 minute
39. Once the actual price and moving average (MA) series are plotted on the same graph, buy and sell
signals are generated. So:
A. buy when the actual price series cuts the MA from below, especially if the MA has been flat or in a
gentle decline.
B. sell when the MA series is rising strongly and the price series cuts or touches the MA from above,
but then moves back above the MA after only a few observations.
C. sell when the MA flattens or declines after a steady rise, and the price series cuts the MA from
above.
D. buy when the MA series is rising strongly and the price series cuts or touches the MA from above,
but then moves back above the MA after only a few observations.
Difficulty: Hard
Est time: <1 minute
40. In relation to technical analysis, a support level is:
A. a level beyond which the market is unlikely to rise.

B. a level below which the market is unlikely to fall.
C. an equilibrium price level supported by earnings and cash flows.
D. the complete cycle of a market wave.
Difficulty: Medium
Est time: <1 minute
41. In relation to technical analysis, what is the level above which the market finds it difficult to rise?
A. Trend channel
B. Resistance level
C. Support level
D. None of the given answers are correct
Difficulty: Easy
Est time: <1 minute
42. In technical analysis, a price level below which the market price is temporarily unlikely to fall is a:
A. trend channel.
B. resistance line.
C. support line.
D. trend line.
Difficulty: Easy
Est time: <1 minute
43. In technical analysis, a price level below which the market price is temporarily unlikely to rise is a:
A. trend channel.
B. resistance line.
C. support line.
D. trend line.
Difficulty: Easy
Est time: <1 minute
44. For technical analysts, the pattern formed by a series of price fluctuations characterised by rising
bottoms and horizontal tops is a/an:
D. a pennant.
Difficulty: Medium
Est time: <1 minute
45. For technical analysts, the pattern formed by a series of price fluctuations composed with each top and
bottom smaller than its predecessor and with transaction volumes usually diminishing is a/an:
D. pole.
Difficulty: Medium
Est time: <1 minute
46. For technical analysts, the pattern formed by three successive rallies with the second rally being greater
than the first or third, is called a:
A. symmetrical triangle.
B. head and shoulder pattern.
C. breakout.
D. triple top.
Difficulty: Medium
Est time: <1 minute
47. A support/resistance pattern plotted by chartists in the stock markets is the rectangle, which consists of
sideways price fluctuations contained within horizontal support and resistance levels. Which of the
following statements in relation to indicators given by support and resistance rectangles is incorrect?
A. Rectangles tend to be characterised by increasing volumes, except for a few days before the breakout
when there are strong decreases in volumes of trade in the share(s).
B. If the last bottom does not touch the support level (beginning the formation of an ascending triangle)
and if prices then rise rapidly on increasing volume, it is likely that there will be a topside breakout.
C. If the tops fail to reach resistance levels, beginning the formation of a descending triangle, a
downside breakout is likely.
D. When a break occurs from a rectangle, the extent of the breakout is likely to equal the height of the
price rectangle.
Difficulty: Hard
Est time: <1 minute
48. In relation to charting, an upward trend line connects the _______ points of a _______ price series,
while a downward trend connects the _______ points of a _______ price series.
A. upper; rising; higher; falling

B. lower; rising; higher; falling
C. upper; falling; lower; rising
D. lower; falling; upper; rising
Difficulty: Medium
Est time: <1 minute
49. The Elliot wave theory maintains that the bullish behaviour of the share market can be explained as:
A. a series of medium-term and long-term waves.

B. a series of long-term waves upwards, and short-term waves downwards.
C. a series of three major waves upwards, followed by two major waves downwards.
D. none of the given answers.
Difficulty: Medium
Est time: <1 minute
50. In relation to share trading, buy and sell orders automatically triggered by rules entered into a computer
program are called:

C. program trading.
D. flash trading.
Difficulty: Medium
Est time: <1 minute
Learning Objective: 07-04 Examine the role of electronic trading in influencing share price movements.
Section: 7.4 Electronic trading
51. In relation to share trading, a dedicated system that operates within an exchange allowing some
institutional investors to place large buy or sell orders without having to disclose the whole trade to the
exchange are:

C. program trading.
D. dark pools.
Difficulty: Medium
Est time: <1 minute
52. In relation to stock exchanges, the term ‘flash trading' refers to:
A. applications of high-speed supercomputers that can place thousands of orders in seconds and then
immediately cancel them.
B. some institutional investors being able to place large buy orders without having to disclose the whole
trade to the exchange.
C. pennants and flags patterns in very fast moving markets.
D. the trades of certain institutional investors that receive information from a stock exchange of
incoming orders before other traders.
Difficulty: Medium
Est time: <1 minute
53. Program trading:
A. is the most likely reason there was a stock market crash in October 1987.
B. occurs only in over-the-counter markets.
C. refers to computer-generated orders to buy or sell many shares at the same time.
D. has been abolished by order of the ASX.
Difficulty: Easy
Est time: <1 minute
54. One of the theories on the determination of, and change in the value of, shares and other securities is the
random walk hypothesis. Which of the following statements in relation to the random walk hypothesis
is correct?
A. The trend of new information into the market may be consistently good or consistently bad over
time.
B. If the price of a share rose in one period, there is a higher probability that it will rise again in the next
period.
C. Share price reflects the share's intrinsic value, based on the latest information set relevant to current
and future prospects.
D. The history of previous price movements contains valuable information on likely future price
movements.
Difficulty: Hard
Est time: <1 minute
Learning Objective: 07-05 Explain the theoretical concepts that form the basis of the random walk hypothesis, and consider the implications of the efficient market
hypothesis and the behavioural finance hypothesis when analysing and forecasting share price movements.
Section: 7.5 The random walk, efficient market and behavioural finance hypotheses
55. If a share price falls on four consecutive days of trading, share prices:
A. cannot be following a random walk

B. can still be following a random walk
C. are almost certain to decrease the next day
D. are almost certain to increase the next day
Difficulty: Medium
Est time: <1 minute
56. Which of the following statements regarding an efficient capital market is correct?
A. All securities that investors would like to invest in are listed.

B. All transactions are closed out and settled within two days.
C. Current prices reflect all current information.
D. The lowest interest rates are offered.
Difficulty: Easy
Est time: <1 minute
57. In an efficient market:
A. security prices are seldom far above or below their justified level.
B. share prices react quickly to new information.
C. investors will not make superior returns consistently.
Difficulty: Medium
Est time: <1 minute
58. The weak form of the efficient market hypothesis asserts that:
A. the change in future share prices cannot be predicted from past share prices.
B. share prices adjust rapidly to new information contained in past prices or past data.
C. technical analysts cannot be expected to outperform the market.
Difficulty: Medium
Est time: <1 minute
59. If the weak form of the efficient market hypothesis holds:
A. share prices follow a random walk.

B. share prices reflect all information contained in past prices.
C. technical analysis is useless.
Difficulty: Medium
Est time: <1 minute
60. Strategies based on technical analysis are most likely to be profitable in a market that is regarded as:
A. following a random walk.

B. semi-strong efficient.
C. not strong-form efficient.
D. not weak-form efficient.
Difficulty: Medium
Est time: <1 minute
61. The weak form of the efficient market hypothesis denies the use of:
A. technical analysis, but supports fundamental analysis as valid.

B. fundamental analysis, but supports technical analysis as valid.
C. both technical analysis and fundamental analysis.
D. technical analysis, but is silent on the possibility of successful fundamental analysis.
Difficulty: Medium
Est time: <1 minute
62. At which level of market efficiency does the efficient market hypothesis support the technical analysis
approach to future share price determination?
A. Weak-form efficiency
B. Semi-strong form efficiency
C. Strong-form efficiency
D. None of the given answers
Difficulty: Medium
Est time: <1 minute
63. The semi-strong form of the efficient market hypothesis states that:
A. future share prices are predictable.

B. all available information is reflected in the price of securities.
C. security prices reflect all publicly available information.
D. None of the given choices are correct.
Difficulty: Medium
Est time: <1 minute
64. When investors cannot make superior profits on a continual basis based on past prices, public or private
information, the market is said to be:
A. weak-form efficient.
B. semi-strong form efficient.
C. strong-form efficient.
D. fundamentally efficient.
Difficulty: Medium
Est time: <1 minute
65. The strong form of the efficient market hypothesis states that:
A. security prices reflect all publicly available information.

B. major market events can be predicted using publicly available information.
C. insider information contains no special advantage.
D. future prices are predictable.
Difficulty: Easy
Est time: <1 minute
66. Which group of investors is able to earn consistent superior profits if the financial markets are strong-
form efficient?
A. Only fundamental analysts will be able to profit

B. Only technical analysts will be able to profit
C. Only specialists, analysts and insiders in the company will be able to profit
D. No one will be able to sustain superior profits
Difficulty: Medium
Est time: <1 minute
67. An investor finds that for a particular group of shares, large positive price changes are always followed
by large negative price changes. This finding violates:
A. the strong form of the efficient market hypothesis.

B. the semi-strong form of the efficient market hypothesis.
C. the weak form of the efficient market hypothesis.
D. none of the given choices.
Difficulty: Medium
Est time: <1 minute
68. If you believe that share prices reflect all information that can be derived from examining the market
trading data such as the history of past share prices, which form of efficient market hypothesis do you
believe in?
A. Weak.
B. Semi-strong.
C. Strong.
D. Informational.
Difficulty: Medium
Est time: <1 minute
69. If you believe that share prices reflect all relevant information, including publicly available information,
which form of the efficient market hypothesis do you believe in?
A. Weak.
B. Semi-strong.
C. Strong.
D. Informational.
Difficulty: Medium
Est time: <1 minute
70. If you believe that share prices reflect all relevant information including information that is available
only to insiders, which form of the efficient market hypothesis do you believe in?
A. Weak.
B. Semi-strong.
C. Strong.
D. Informational.
Difficulty: Easy
Est time: <1 minute
71. Proponents of the efficient market hypothesis assert that technical analysts:
A. should focus on resistance levels.

B. should focus on relative strength.
C. should focus on support levels.
D. are wasting their time and money.
Difficulty: Medium
Est time: <1 minute
72. When new information becomes public in the market, evidence suggests that:
A. transaction costs will erase any benefit of trading on the new information.
B. insiders will be the only investors to gain.
C. it takes at least three trading days for share prices to adjust.
D. share prices adjust rapidly to the new information.
Difficulty: Medium
Est time: <1 minute
73. It may be argued that share prices on the Australian Securities Exchange (ASX) reflect all publicly
available, relevant information regarding listed companies, and therefore superior profits cannot be
made by an investor using publicly available information. Based on the above contention, which of the
following statements best describes the informational efficiency of the ASX?
A. Strong-form efficiency.
B. Semi-strong form efficiency.
C. Weak-form efficiency.
D. Random walk efficiency.
Difficulty: Medium
Est time: <1 minute
74. Research indicates that the correlation coefficient between successive days' share price changes is:
A. quite close to +1.

B. quite close to zero.
C. quite close to –1.
D. directly related to the share's beta.
Difficulty: Hard
Est time: <1 minute
75. If share prices appear to follow a random walk:
A. selecting shares for portfolios is irrelevant.

B. investment analysts are unimportant.
C. successive share price changes are unpredictable.
D. it is impossible to know when to buy shares.
Difficulty: Easy
Est time: <1 minute
76. Research of actively managed portfolios, managed by professional portfolio managers:
A. indicates that one should not randomly select managed portfolios managed by professional portfolio
managers.
B. indicates that historical performance is a good indicator of future performance.
C. indicates that professional management provides investors with superior market returns.
D. indicates the majority of professional portfolio managers outperform the market.
Difficulty: Medium
Est time: <1 minute
77. Which of the following statements is correct?
A. If the share market follows a random walk, price changes should be highly correlated.
B. A random walk for share price changes is inconsistent with observed patterns in price changes.
C. If the share market is weak-form efficient, the share prices follow a random walk
Difficulty: Medium
Est time: <1 minute
78. In relation to behavioural finance, if an investor is influenced to follow other investors into certain
investment opportunities, this is called:
A. trading noise.
Difficulty: Medium
Est time: <1 minute
79. In relation to behavioural finance, if an investor is influenced by the manner in which an investment
opportunity is presented this is called:
A. trading noise.
Difficulty: Medium
Est time: <1 minute
80. In relation to behavioural finance, if investors do not seek to maximise returns on investments but are
quite willing to accept a lesser outcome or return, it is called:
A. trading noise.
D. heuristic behaviour.
Difficulty: Medium
Est time: <1 minute
81. Consider the following five statements:
i. Technical analysts rely on very sophisticated technical models of the macroeconomic environment.
ii. Since all chartists are confronted with identical share price data, they should identify very similar
patterns and generate identical buy and sell signals from the data.
iii. A chartist will draw resistance levels at higher share price levels where an increase in supply halts
price increases.
iv. Chartists will draw support lines at lower price levels where an increase in demand halts a price fall.
v. The random walk hypothesis, as applied to share price movements, implies that the examination of
past price movements yields no useful information on the course of future price movements.
How many of these statements are true and how many are false?
A. 4 statements are true and 1 is false.

B. 3 statements are true and 2 are false.
C. 2 statements are true and 3 are false.
D. 1 statement is true and 4 are false.
Difficulty: Hard
Est time: <1 minute
True / False Questions
82. When investors become dissatisfied with a company share and sell their shares, the increased supply of
that company's shares is likely to result in a drop of its share price.
TRUE
Share prices are determined by the forces of supply and demand for them.
Difficulty: Easy
Est time: <1 minute
analysis.
83. Fundamental analysis top-down approach considers how the directors of the company affect its share
performance.
FALSE
Fundamental analysis considers macro and micro fundamentals that impact on future share price
changes.
Difficulty: Easy
Est time: <1 minute
analysis.
84. The bottom-up approach to fundamental analysis considers the impact of forecast changes in systematic
market variables.
FALSE
The bottom-up approach considers the historical and forecast performance of individual company shares
in a selected sector.
Difficulty: Easy
Est time: <1 minute
analysis.
85. The rate of growth in major international economies can have a strong impact on expected performance
of local companies within a domestic economy.
TRUE
The rate of growth of major economies represents a systematic factor.
Difficulty: Easy
Est time: <1 minute
analysis.
86. Historical growth trends in developed countries suggest sustainable long-term growth is in the range of
3 and 4% per annum.
TRUE
Found in economic research of historical economic data.
Difficulty: Easy
Est time: <1 minute
analysis.
87. High levels of economic growth in developing countries may not be sustainable in the long term and
may lead to depreciation of those countries' exchange rates and rises in interest rates.
TRUE
Historically, places such as Asian countries have had high levels of growth, resulting in some cases in
high levels of inflation and wage growth and so have experienced depreciating exchange rates.
Difficulty: Medium
Est time: <1 minute
analysis.
88. With the top-down approach to fundamental analysis, the balance of payments current account deficit is
not considered because it is a country factor.
FALSE
Balance of payments current account deficit represents a macro factor to be considered.
Difficulty: Medium
Est time: <1 minute
analysis.
89. Firms that conduct business in a country's domestic market may be affected by a fall in the local
exchange rate that leads to an increase in the rate of inflation.
TRUE
If there is a fall in the exchange rate a firm's profits when translated to the overseas parent company
could be affected unless hedged in some way.
Difficulty: Medium
Est time: <1 minute
analysis.
90. A limitation of fundamental analysis is that forecasting using fundamentals can suggest the market is
overvalued but does not forecast the timing of the downturn.
TRUE
A drawback of fundamental analysis is calculating performance ratios with historical data. It is possible
that future performance will be different.
Difficulty: Medium
Est time: <1 minute
analysis.
91. When the moving average (MA) series is rising strongly and the share price series cuts or touches the
MA from below, this represents a sell signal for technical analysts.
FALSE
For analysts that use technical analysis it is a buy signal when it cuts or touches the MA from above and
moves back above.
Difficulty: Medium
Est time: <1 minute
Short Answer Questions
92. Why should an investor consider the issue of interest rates when analysing share investments? Explain
the impact a change in interest rates might have on the performance of a corporation and its share price.
The majority of companies are exposed to interest rate risk because they will have some degree of debt
in their capital structure and the interest must be paid to the provider. If interest rates are predicted to
increase it is expected that the cost of doing business will increase, with a decrease in profitability. This
will have a downward pressure on the share price, especially if the company has a large degree of debt.
Est time: 1-3 minutes

analysis.
93. Compare the two main approaches to fundamental analysis: top-down and bottom-up.
Fundamental analysis considers the macro and micro variables that will impact on future share price
changes. A top-down approach first considers the overall economic environment and how changes in
the economic environment will impact on the various firms and industry sectors. A bottom-up approach
analyses individual firms within industry sectors, looking at such variables as a company's capital
structure, liquidity, debt servicing, and profitability.

analysis.
94. What is a moving average model? Explain how it is used in technical analysis.
A moving average model is when a series of numbers are averaged to smooth out more erratic
movements. By calculating moving averages on prices, a technical analyst looks at trends in the series
to generate buy and sell signals; for example, when an actual price series cuts the moving average series
from below this is a buy rule.

95. Charting is a type of technical analysis. Explain the process in relation to forecasting share price
movements.
Charting procedures involve using patterns to forecast future share price movements. Trend lines,
support and resistance lines, continuation patterns and reversal patterns are some of the major tools used
by chartists; for example, if an upward trend line has been in force, the more times it has been tested the
greater is its validity of representing an upward trend in share prices.

96. What is program trading in relation to the share market? Discuss any impact on share price movements.
Program trading refers to the use of computer-based programs that carry out buy and sell orders
automatically triggered by rules entered into the program. Such programs may include relatively basic
programs that include the technical analysis buy/sell rules or more sophisticated programs that monitor
share market price movements and issue buy or sell orders on specific shares or futures contracts. Often
large amounts are involved and the effect of program trading may be to cause share prices to change
faster; for example, swamping the market with sell orders. Many stock exchanges do have rules in place
to suspend trading if the share market index moves by more than a specified percentage to reduce a
potential contagion effect.

Another random document with
no related content on Scribd:
30
Oct
11658 Menk W “ 12 F
30
Morrow J C, S’t 101 Oct
11683
Maj E 31
Oct
11684 McCann J Cav 11 L
31
184 Oct
11686 Moore W
B 31
Oct
11692 Mulligan J 7H
31
Nov
11909 McCune J 67 E
8
Nov
11913 McClush N 97 E
8
Nov
11982 Manee M 53 H
13
145 Nov
12008 McCray J
A 14
118 Nov
12088 Maher D
E 18
Nov
12103 Miller W 31 I
22
Dec
12248 Murray W Cav 14 H
8
Dec
12326 McIntire J 55 C
24
Dec
12334 Myers A D 52 A
26
Jan
12554 Matthews J Cav 6F 65
30
184 Feb
12595 Maloy J M
D 5
Feb
12625 McGenger J 20 C
9
12696 Myers H 87 E Feb
23
Mar
12771 McDonald —— 9G
13
103 Feb
12806 McGarrett R W
F 21
May
1134 Nicholson Jno Cav 3H 64
16
May
1298 Nelson Wm 76 H
23
July
2832 Nolti Wm 6F
3
183 July
3653 Newell G S
A 20
July
4246 Nicholson W Cav 1H
29
Aug
4489 Nelson Geo 2K
1
Aug
4936 Naylor G W, S’t Cav 13 L
7
125 Aug
5109 Nichols D A
D 9
Aug
6001 Neal H G 90 B
17
37 Aug
6011 Nickle C
G 17
77 Aug
6702 Nickem Jas
G 24
Sept
8154 Naylor S Cav 20 H
8
Sept
8907 Noble J 73 D
16
Sept
9424 Nice Isaac 11 L
21
9468 Neff J Cav 4D Sept
21
Oct
10146 Nelson G 55 A
1
145 Oct
10286 Nelson J A
G 4
Oct
10764 Newberry Jno Cav 20 A
12
160 Oct
11107 Nelson A
E 18
19 Oct
11254 Noble Thos Cav 64
G 21
Nov
11776 Nichols G 20 C
3
April
414 Osbourne S K 4K
7
April
622 Oglesby J Cav 4K
19
May
1318 O’Brien P 13 A
23
May
1409 Ottinger I Cav 8 I
27
June
1817 O’Neil Jno, S’t 69 -
12
55 June
2589 Oswald Stephen
G 28
July
3161 O’Conor —— 83 -
11
July
3199 O’Neil J 63 I
12
July
3704 Olmar H, S’t Cav 2H
21
July
3861 O’Connor H 49 E
24
July
4161 Owens G H 7A
28
5119 Offlebach Z 90 K Aug
9
103 Aug
5184 Oliver W
D 9
101 Aug
5939 O’Hara M
E 17
183 Aug
6254 O’Connell Wm
G 20
150 Aug
6535 O’Hara Jno
E 23
103 Aug
6658 Oiler Sam
G 24
109 Aug
6908 O’Rourke Chas
C 26
Aug
7105 Otto Jno Cav 5B
28
Sep
9330 Owens E 50 D
20
Oct
10805 Osborn E, Cor Cav 11 A
13
Mar
30 Peck Albert 57 K
9
Mar
62 Patterson Rob Res 2E
18
Mar
125 Parker Jas M, Cor 76 B
23
April
500 Petrisky H 54 F
12
May
1110 Patterson T Cav 3A
15
73 May
1119 Patent Thos
G 15
May
1258 Powell Wm Cav 14 D
21
1556 Powers Jno 26 I June
2
June
1780 Preso Thos 26 E
9
June
1884 Powell Frank 18 -
12
183 June
2566 Page J
G 27
101 June
2590 Porter David
H 28
103 July
2903 Parsons J T
D 5
July
3197 Painter J G 26 F
11
July
3445 Painter S 63 A
17
101 July
4049 Patterson R
H 27
July
4157 Pickett J C Cav 3A
28
July
4177 Pratt F “ 14 I
28
July
4191 Plymeer W “ 20 B
28
112 July
4415 Page Jno
A 31
102 Aug
4473 Powell H
H 1
Aug
5323 Prosser J 63 -
11
72 Aug
5579 Pyers Isaac
G 14
101 Aug
5610 Phillips Jas B
I 14
184 Aug
5947 Parish J A
- 17
6341 Preans H 149 Aug
K 21
140 Aug
6439 Palmer H
D 22
Aug
6527 Poole G 52 B
22
13 Aug
6536 Pifer M
G 23
Aug
6574 Phillips J W Cav 1F
23
103 Aug
6843 Peterson G
D 25
Aug
6844 Penn Jno Cav 5E
25
Aug
6885 Patten H W Art 2F
26
183 Aug
7118 Potts Edw
H 28
103 Aug
7232 Perkins N
D 29
149 Sept
8030 Powell A T
C 6
Sept
8160 Pricht F 87 H
8
145 Sept
8763 Peck C W
H 14
101 Sept
8877 Persil Frederick
- 15
143 Sept
9220 Palmer A
D 19
143 Sept
9684 Perego W
G 24
Sept
9754 Phipps J H 57 E
26
10074 Price G 106 Sept
H 30
144 Oct
10573 Penstock A
B 9
101 Oct
10858 Powell I 64
I 13
109 Oct
11168 Price O
C 19
Oct
11261 Phay M 69 C
21
Oct
11637 Phillips F 61 K
28
145 Nov
11737 Pees M T
H 2
Nov
11833 Penn J Cav 18 I
6
Nov
11918 Phelps W “ 4G
8
Oct
11328 Porterfield J K “ 5M
23
Nov
12075 Pencer W 18 C
18
Nov
12191 Pryor Wm 11 C
28
Dec
12359 Poleman H Cav 1F
30
121 Jan
12378 Perry H 65
C 2
Jan
12388 Pritchett J 72 C
8
148 Jan
12479 Potter B F
I 17
Aug
6756 Quinby L C 76 E 64
24
Mar
47 Reed Sam Cav 4D
15
126 Robertson J 119 Mar
K 23
49 Mar
132 Rosenburg Henry
G 24
Mar
171 Reign Jno 83 K
26
April
308 Richpeder A 13 B
2
April
610 Ray Wm Cav 8F
18
May
847 Rhinehart J “ 3D
3
May
895 Russell F 4D
3
May
907 Rhinebolt J Cav 18 I
5
150 May
940 Robinson C W, S’t
E 7
May
1152 Randall H Cav 4H
16
May
1218 Rigney Chas “ 4G
19
51 May
1454 Raleigh A
G 29
May
1485 Rudolph S, Cor Cav 13 K
30
June
1599 Rhine Geo 63 I
4
June
1624 Rosenburg H Cav 13 H
4
June
1719 Raymond Jno, S’t “ 18 H
8
June
1803 Rheems A, S’t 73 I
10
1833 Ramsay J D 103 June
F 11
18 June
1922 Rush S
G 14
June
1942 Robinson Wm 77 D
14
101 June
2225 Roush Peter
E 20
June
2528 Rupert F Cav 2H
26
June
2602 Roat J 54 F
28
July
2735 Rhoades F 79 E
1
July
2911 Rock J E 5M
5
July
2979 Regart Jno Cav 13 E
7
July
2103 Ray A, S’t 77 E
17
103 July
3024 Rugh M J
D 7
July
3270 Robins R 69 B
13
148 July
3468 Ransom H
I 17
July
3827 Rinner L Cav 5A
23
July
4074 Ringwalk J F 79 H
27
115 July
4241 Roger L
L 29
July
4309 Rogers C 73 C
30
184 Aug
4476 Ray Jas R
B 1
4507 Riese S 103 Aug
D 1
103 Aug
4844 Richie Jas
B 6
Aug
4940 Ruthfer J Art 2F
7
101 Aug
5319 Rice Sam’l
K 11
103 Aug
5389 Ross David
B 12
Aug
5430 Robinson John 99 D
12
Aug
5537 Rose B 13 I
13
Aug
5800 Robins J Cav 2M
15
Aug
5879 Rider H “ 7L
16
143 Aug
5894 Richards E
E 16
103 Aug
5912 Reese Jacob
B 17
Aug
5940 Richards Jno, Cor Cav 1G
17
106 Aug
6321 Robbins G
G 21
110 Aug
6373 Roger Jno L
H 21
Aug
6520 Reynolds J 14 H
22
103 Aug
6725 Rowe E, Cor
A 24
149 Aug
6777 Rangardener J 64
H 25
6789 Richards G Cav 13 A Aug
25
Aug
6790 Runels Jno “ 6L
25
188 Aug
6822 Rum A
C 25
148 Aug
6838 Reese D
K 25
Aug
6896 Raiff T 1A
26
Aug
6933 Richardson —— 61 -
26
143 Aug
7067 Reese D
F 28
103 Aug
7202 Ruff J
F 29
Aug
7292 Redmire H 98 B
30
Aug
7293 Robins Geo 62 A
30
103 Aug
7410 Richardson H
K 31
Sept
7467 Richard D Cav 18 D
1
Sept
7716 Rice E 7B
3
101 Sept
7738 Roads Frederick
E 3
Sept
8139 Rathburn K 2F
8
Sept
8540 Russell S A, Cor 79 A
12
149 Sept
8545 Ray A
D 12
106 Sept
8602 Richards J
H 12
8635 Rhangmen G, S’t 138 Sept
D 13
Sept
8742 Root D 48 B
14
Sept
9019 Ret Geo 18 A
17
149 Sept
9272 Ramsay J I
- 19
Sept
9585 Richie H 11 F
23
Sept
9599 Renamer W H 87 H
23
113 Sept
9612 Richards Jno
D 23
103 Sept
9653 Reed R
A 24
Sept
9766 Ramsay R 84 D
25
Sept
9882 Richards J 53 K
27
Oct
10174 Reed J 55 A
1
Oct
10863 Ramsay Wm 87 B
13
Oct
10622 Reedy E T, S’t 87 B
10
Oct
10935 Roundabush H B 51 A
14
Oct
10947 Rockwell A Cav 2L
14
Oct
11071 Raeff J B 72 E
17
Oct
11115 Rinkle Jno A 20 A
18
11293 Rolston J 18 F Oct
22
Oct
11147 Rudy J 13 F
19
189 Oct
11444 Riffle S G, Cor
C 25
144 Oct
11566 Richardson A
E 27
111 Nov
11868 Rowland N
F 6
Nov
12008 Rapp A E Cav 18 I
15
Nov
12048 Ruth B S 23 I
16
101 Dec
12206 Rothe C
A 1
Dec
12355 Reese D 7A
29
128 Jan
12372 Reed W S 65
H 1
April
377 Smith M D 18 B 64
5
April
788 Smith Geo Cav 5H
28
May
881 Smith Wm 4A
4
19 May
882 Smith T
G 4
12 May
921 Steffler W J, S’t Cav
G 6
May
1014 Serend H “ 4D
10
May
1030 Shebert Gotlieb 73 C
11
May
1058 Spilyfiter A 54 F
13
1105 Sullivan D 101 May
K 15
140 May
1114 Shindle S R, S’t
K 15
May
1155 Stearnes E K Cav 14 A
16
May
1169 Sloat D 76 I
16
May
1175 Scott Wm 4B
16
139 May
1216 Severn C
A 19
May
1256 Sammoris B, S’t Cav 2B
21
May
1349 Smith Chas 26 A
24
May
1453 Schlenbough C Cav 4G
29
May
1503 Smith Martin “ 18 H
31
June
1535 Stone Samuel 26 F
1
June
1543 Shoemaker M, S’t Cav 13 H
1
June
1605 Swearer G 13 H
4
June
1620 Schiefeit Jacob 54 F 64
4
June
1632 Schmar R 45 F
5
June
1963 Smith D Cav 11 H
14
June
2039 Slough H 53 -
15
2070 Stevens A Cav 13 June
M 16
June
2121 Sherwood C H, S’t “ 4M
17
June
2123 Stall Sam’l 75 D
17
June
2126 Say J R Cav 4K
17
June
2163 Steele J S “ 7F
19
June
2259 Scoles M 27 K
21
14 June
2331 Sims B Cav
G 22
June
2412 Shop Jacob 2M
24
101 June
2622 Springer Jno
E 28
103 June
2650 Stewart J B
A 29
150 July
2725 Scott Allen
H 1
73 July
2738 Schimgert J
G 1
July
2791 Shimer J A Cav 13 A
2
July
2864 Scott Wm, (negro) 8D
4
July
2905 Stump A 11 I
5
July
2941 Smith Jacob 51 H
6
140 July
2982 Shaw W
B 7
112 July
2999 Smulley Jno
K 7
3057 Sutton R M 103 July
I 9
July
3113 Sweet H 57 K
10
148 July
3136 Shoemaker M
G 10
July
3154 Sillers Wm 77 D
11
53 July
3214 Stone W F
G 12
103 July
3480 Swelser J
D 17
July
3567 Smalley L 58 K
19
150 July
3568 Stevens S G
H 19
116 July
3586 Sickles Daniel
K 19
142 July
3632 Serders J S
K 20
July
3670 Stopper Wm 16 B
20
172 July
3763 Stillenberger F
F 22
July
3775 Strance D 11 H
22
July
3855 Smith J 79 F
24
77 July
3906 Smith O C
G 24
144 July
3956 Seilk A
D 25
July
3960 Sullivan T 77 F
25
4006 Smith F 64 K July
26
July
4009 Shafer J H 84 E
26
103 July
4012 Shapley Geo
G 26
July
4043 Strickley C 53 H
27
19 July
4064 Shriveley E S Cav
M 27
145 July
4113 Sheppard E
G 28
101 July
4164 Smith S W
B 28
July
4213 Shaffer Peter 52 F
29
July
4223 Shister F Cav 3A
29
July
4228 Stein J 7G
29
July
4274 Sloan J 11 E
29
July
4285 Shone P Cav 4D
30
101 July
4345 Stobbs W W, Cor
E 30
July
4348 Scott A 22 F
31
July
4351 Scundler J 67 A
31
July
4372 Smith P 72 C
31
15 Aug
4566 Sale Thos
M 2
Aug
4775 Shink Jas 81 F
5
4791 Sullivan Ed 67 H Aug
5
Aug
4797 Sear C Cav 14 L
5
Aug
4845 Shember Jno “ 11 D
6
Aug
4928 Slicker J 77 D
6
61 Aug
4931 Sheit P
G 7
Aug
4945 Swartz P, Cor 27 I
7
22 Aug
5160 Stiner Jno Cav
G 9
Aug
5189 Striker F “ 14 C
9
184 Aug
5215 Sworeland Wm
A 10
118 Aug
5232 Speck A
A 10
Aug
5411 Shaffer Daniel Cav 13 F 64
12
103 Aug
5529 Spangrost A
D 12
149 Aug
5437 Shears J S
K 12
Aug
5463 Stibbs W 56 H
13
Aug
5494 Shape F Cav 18 A
13
Aug
5603 Somerfield W 69 E
14
150 Aug
5700 Stinebach A
C 15
5750 Spears W M, S’t Cav 2K Aug
15
Aug
5874 Sheppard N 79 F
16
Aug
5965 Shultz F Cav 13 K
17
103 Aug
6205 Shoop G
K 19
Aug
6289 Smith H 26 K
20
Aug
6337 Smith W Cav 18 B
21
101 Aug
6382 Swager M
F 21
118 Aug
6436 Spain Thos
H 22
Aug
6523 Stover J 49 F
22
149 Aug
6526 Stahler S
G 22
118 Aug
6534 Snyder Jno
C 23
Aug
6584 Sloate E 50 D
23
105 Aug
6595 Shirley Henry
I 23
Aug
6669 Sherwood P 84 I
24
150 Aug
6776 Shellito R
C 25
118 Aug
6823 Spain Richard
H 25
79 Aug
6829 Sturgess W A, Cor
G 25
Aug
6880 Stuler D Cav 4A
26
7029 Strickler J W 11 F Aug
27
Aug
7106 Smith Jno F 55 C
28
Aug
7137 Sloan J M Cav 18 D
28
113 Aug
7141 Springer J
F 29
Aug
7262 Shriver B Cav 18 K
30
Aug
7302 Singer J Art 2A
30
Aug
7358 Scoleton J 53 F
31
Aug
7363 Sweeney D Cav 14 E
31
Aug
7379 Scott W B “ 4D
31
Sept
7631 Streetman J 7E
2
62 Sept
7638 Steele J
M 2
Sept
7648 Spencer Geo 20 C
3
183 Sept
7662 Snyder M S
A 3
Sept
7705 Swartz Geo Cav 5A
3
Stockhouse D, Sept
7770 “ 18 I
Cor 4
149 Sept
7905 Sellers H
G 5
Sept
7939 Shultz Jno Cav 4 I
5
7960 Smith A C 7F Sept

Financial Institutions Instruments and Markets 7Th Edition Viney Test Bank Full Chapter PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Institutions Instruments and Markets 7Th Edition Viney Test Bank Full Chapter PDF

Uploaded by

Copyright:

Available Formats

Financial Institutions Instruments and

Markets 7th Edition Viney Test Bank

Multiple Choice Questions

A. buy; increased; rise

A. increased demand; rise

A. GDP growth between 1 and 2%

A. more the currency increases.

A. loosen monetary policy.

A. variability in the current account balance of the balance of payments.

A. profits; increased exports; less

A. identifies the level of systematic risk within industry sectors.

A. identifies specific firms to include in an investment portfolio.

A. An upward pressure on wages

Ratio Company A Company B Company C Company D

A. higher the expected share price.

22. The lower the degree of unsystematic risk, the:

A. higher the diversification of a share portfolio.

A. abolish systematic risk.

A. fundamentals of price movements only.

28. Compared with fundamental analysis, technical analysis focuses on:

A. security prices react rapidly to new information.

30. Technical analysts basically believe that security prices:

33. A graph of average price series constructed over time is called a:

A. downward trend line.

A. $6.23; $5.95; $5.80

A. buy the share.

A. forecast future cash earnings of a company.

A. buy the share.

40. In relation to technical analysis, a support level is:

A. a level beyond which the market is unlikely to rise.

A. upper; rising; higher; falling

A. a series of medium-term and long-term waves.

A. high frequency trading.

A. high frequency trading.

53. Program trading:

A. cannot be following a random walk

A. All securities that investors would like to invest in are listed.

59. If the weak form of the efficient market hypothesis holds:

A. share prices follow a random walk.

A. following a random walk.

A. technical analysis, but supports fundamental analysis as valid.

A. future share prices are predictable.

A. security prices reflect all publicly available information.

A. Only fundamental analysts will be able to profit

A. the strong form of the efficient market hypothesis.

A. should focus on resistance levels.

A. quite close to +1.

75. If share prices appear to follow a random walk:

A. selecting shares for portfolios is irrelevant.

76. Research of actively managed portfolios, managed by professional portfolio managers:

77. Which of the following statements is correct?

81. Consider the following five statements:

A. 4 statements are true and 1 is false.

True / False Questions

Short Answer Questions

Multiple Choice Questions

A. buy; increased; rise

A. increased demand; rise

A. GDP growth between 1 and 2%

A. more the currency increases.

A. loosen monetary policy.

A. variability in the current account balance of the balance of payments.

A. profits; increased exports; less