Proponents of which of the following technical theories assume that small investors are usually wrong?

A)Volume of trading.

B)Short interest.

C)Breadth of market.

D)Odd lot.

Answer: D)Odd lot.

A technical analyst would be most interested in which of the following?

A)Price-to-earnings ratios.

B)Working capital.

C)Capitalization ratios.

D)200-day moving averages.

Answer: D)200-day moving averages.

One method used by some analysts to estimate the future value of a stock is the dividend growth model. This model would probably be most useful in the case of a:

A)AAA corporate bond.

B)small-cap stock.

C)large-cap stock.

D)cumulative preferred stock.

Answer: C)large-cap stock.

A client approaches the IAR handling the advisory account with a request to find a preferred stock that will offer a 6% income return. The IAR suggests a stock paying a $.28 quarterly dividend. That stock will meet the income objective if it has a current market price of

A)$6.72

B)$18.67

C)$4.67

D)$11.91

Answer: B)$18.67

A technical analyst (chartist) with a long position in a particular stock would most likely enter a sell stop order below that stock's:

A)200-day moving average.

B)previous high.

C)support level.

D)resistance level.

Answer: C)support level.

When using the Dividend Discount Model,

A)the discount rate is generally lower than the expected rate of return

B)future expected dividends are discounted to compute the present value of the stock

C)​​​the degree of accuracy in forecasting the price of preferred stock is less​ than​ that ​obtained by using the dividend growth model

D)best results are obtained from stocks that pay irregular dividends

Answer: B)future expected dividends are discounted to compute the present value of the stock

Which of the following is used in technical analysis in an attempt to modify fluctuations of stock prices over the long term into a smoothed trend?

A)trend lines.

B)support and resistance.

C)moving averages.

D)consolidation.

Answer: C)moving averages.