The advance/decline line is be used to time both the purchase and the sale of securities.

The advance/decline line is being used to time both the purchase and the sale of securities.

Answer: TRUE

Charts are useful as a means of spotting developing trends.

Charts are used as a means of spotting developing trends.

Answer: TRUE

Charts are only used to confirm past trends.

Charts are only used to confirm past trends.

Answer: FALSE

The purpose of moving averages is to reduce the effect of random, short-term market fluctuations.

The purpose of moving averages is to reduce the effect of random, short-term market fluctuations.

Answer: TRUE

The simple moving average is a weighted average.

The simple moving average is a weighted average.

Answer: FALSE

The relative strength index compares a security's price relative to itself over a period of time.

The relative strength index compares a security's price relative to itself over a period of time.

Answer: TRUE

Even if the semi-strong form of the efficient market hypothesis is true, trading on illegal insider information may lead to abnormal profits.

Even if the semi-strong form of the efficient market hypothesis is true, trading on illegal insider information may lead to abnormal profits.

Answer: TRUE

Advocates of the weak-form efficient market hypothesis claim that past price movements are the best predictors of future price movements.

Advocates of the weak-form efficient market hypothesis claim that past price movements are the best predictors of future price movements.

Answer: FALSE

If stock prices move randomly, charting and technical analysis are useful investment tools.

If stock prices move randomly, charting and technical analysis are useful investment tools.

Answer: FALSE

For most companies, the stock price follows the same seasonal pattern as revenues and earnings.

For most companies, the stock price follows the same seasonal pattern as revenues and earnings.

Answer: FALSE

Some behavioral characteristics cause investors to realize lower investment returns.

Some behavioral characteristics cause investors to realize lower investment returns.

Answer: TRUE

There is strong evidence that investors who trade frequently outperform the market.

There is strong evidence that investors who trade frequently outperform the market.

Answer: FALSE

Self-attribution bias causes investors to attribute their successes to skill and failures to chance.

Self-attribution bias causes investors to attribute their successes to skill and failures to chance.

Answer: TRUE

Most investors are slow to accept evidence that contradicts their strongly held beliefs.

Most investors are slow to accept evidence that contradicts their strongly held beliefs.

Answer: TRUE

Most investors quickly sell their losers and hold on to their winners.

Most investors quickly sell their losers and hold on to their winners.

Answer: FALSE

Analysts tend to issue similar recommendations on individual securities.

Analysts tend to issue similar recommendations on individual securities.

Answer: TRUE

Individuals tend to invest in mutual funds that have recently been performing well.

Individuals tend to invest in mutual funds that have recently been performing well.

Answer: TRUE

Fund managers tend to have too little confidence in their abilities leading them to be excessively cautious.

Fund managers tend to have too little confidence in their abilities leading them to be excessively cautious.

Answer: FALSE

Behavioral finance suggests that investors react to new information in an efficient manner such that security prices accurately reflect the new information.

Behavioral finance suggests that investors react to new information in an efficient manner such that security prices accurately reflect the new information.

Answer: FALSE

Stocks of small companies have a historical tendency to do especially well in the month of January.

Stocks of small companies have a historical tendency to do especially well in the month of January.

Answer: TRUE