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What is the importance of time in interpreting the saucer and peak patterns?

A.

Longer time periods increase the signaling importance of saucers but not of peaks

B.

Saucer bottoms are more valid when they form over a short time period

C.

Long time periods between market peaks and troughs reduce the potential for a market reversal

D.

Longer formation time periods increase the signaling importance of both saucers and peaks

According to Charles Dow, what has been the main downfall of Wall Street investors?

A.

Independent thinking

B.

Failure to stay the course

C.

Pride of opinion

D.

Failure to abide by classic trading rules

Which of the following is a CORRECT interpretation of volume?

A.

In an uptrend, volume should increase on down days

B.

In a downtrend, volume should increase on up days

C.

Price precedes volume

D.

Volume precedes price

Which of the following is the short-term trading cycle that tends to influence most commodity markets?

A.

10-day

B.

12-day

C.

19-day

D.

28-day

Which of the following patterns resonate with the price action highlighted within the black box marked 'A' & 'B'?

A.

Piercing Line & hammer

B.

Piercing Line & Evening Star

C.

Bullish Engulfing & Shooting Star

D.

Bullish Engulfing & Hanging Man

Extrapolation errors occur when investors:

A.

assume that current and recent conditions will prevail well into the future, also causing them to ignore the evidence of changing circumstances.

B.

tend to be overconfident regarding their abilities and make major mistakes like too little diversification and over trading.

C.

are tricked into thinking that they can foretell the future because they can easily observe the past.

D.

try to identify patterns in financial markets that do not exist.

Identify the following assumption under the correlation coefficient:

A.

Linearity

B.

Normality

C.

Outliers and homoscedasticity

D.

All of the above

Which of the following is a general rule for trading futures?

A.

Due to the fact that markets only trend 30% of the time, 100% of capital should be invested at all times

B.

The majority of capital should be committed to the strongest market since it is rare that more than two or more markets will experience a major move simultaneously

C.

Total amount risked on any single trade should not exceed 5% of equity

D.

At least 50% of total equity should be dedicated to the market group with the strongest trend

In a meeting with his firm's senior research analyst, George Powel, a proponent of the CFA Institute Research Objectivity Standards (ROS), stated that the key objective of the ROS is to create voluntary reporting of

research practices that promote independent and objective research to CFA Institute on an annual basis. With regard to his statements about the objectives of the ROS.

A.

he is correct.

B.

he is incorrect.

C.

He is correct about the voluntary reporting aspect.

D.

He is correct about the independent and objective research aspect.

Which of the following is true of the three black crows' pattern?

A.

The color of the real bodies is of utmost importance to its significance

B.

It is continuation pattern

C.

The three candles do not have to be on consecutive trading periods

D.

When succes