CMT-Level-II by CMT Association Actual Free Exam Q&As

Question 1

Which of the following is a component of the Code of Ethics?
CFA Institute members shall:

A. maintain and improve the competence of other investment professionals. B. use particular care in determining applicable fiduciary duty. C. use reasonable care and exercise independent professional judgment. D. practice and encourage others to practice in a professional and an ethical manner.

Discussion 0

Correct Answer: D Vote an answer

Question 2

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. try to identify patterns in financial markets that do not exist. C. are tricked into thinking that they can foretell the future because they can easily observe the past. D. tend to be overconfident regarding their abilities and make major mistakes like too little diversification and over trading.

Discussion 0

Correct Answer: A Vote an answer

Question 3

What is the bearish counterpart to the Piercing Line candlestick pattern?

A. Shooting Star followed by an Inverted Hammer B. Hanging Man C. 3 Black Crows D. Dark Cloud Cover

Discussion 0

Correct Answer: D Vote an answer

Question 4

Which of the following would BEST improve the profitability of a trend-based trading system?

A. Utilize candlestick charts instead of bar charts B. Increase the delay in taking action after a trade signal is given C. Utilize support and resistance lines D. Use of additional trend periods

Discussion 0

Correct Answer: B Vote an answer

Question 5

Which of the following are valid point and figure chart trading tactics?

A. Simple trade signals can be used for new commitments whereas complex signals are needed for liquidation purposes B. Long positions are closed when they fall below the trend line and short positions are closed when they rise above the trend line C. Stop losses should be placed below the last column of Os in an uptrend D. All of the ab

Discussion 0

Correct Answer: C Vote an answer

Question 6

Which of the following is true of moving averages?

A. Oscillators always provide more valid trade signals than moving averages B. Moving averages provide the most valid trade signals in trending markets C. Moving averages always provide more valid trade signals than oscillators D. Moving averages provide the most valid trade signals in sideways markets

Discussion 0

Correct Answer: B Vote an answer

Question 7

Which of the following pieces of information is NOT contained in the CFTC's Commitment of Traders report?

A. Historical open interest of each contract B. Current open interest of each contract C. Positions of hedgers and speculators D. Reportable and non-reportable positions

Discussion 0

Correct Answer: A Vote an answer

Question 8

Which of the following would be a valid trading interpretation of top chart patterns?

A. Liquidate positions at prior major resistance points, top formations or the break of a major support line B. Sell when there is a major price retrenchment in a bull market C. Sell whenever a major support level is tested but not breached D. Find a market with a long consolidating base and high volatility

Discussion 0

Correct Answer: A Vote an answer

Question 9

Which of the following is NOT a valid technical method for determining price targets?

A. Measure of triangle base from breakout B. Discounted value of expected future cash flows C. Height of the head in a head and shoulders pattern D. Channel width

Discussion 0

Correct Answer: B Vote an answer

Question 10

Which of the following places the cycles in time length order?

A. Alpha/beta, presidential, seasonal, lunar, and Kondratieff B. Alpha/beta, lunar, seasonal, presidential and Kondratieff C. Lunar, presidential, seasonal, alpha/beta and Kondratieff D. Kondratieff, presidential, alpha/beta, seasonal and lunar

Discussion 0

Correct Answer: B Vote an answer

Question 11

Which market tends to have the GREATEST amount of volatility?

A. Currencies B. Bonds C. Eurodollars D. Equities

Discussion 0

Correct Answer: D Vote an answer

Question 12

When using the Bar/Candle method to portray volume what is the relationship defined between price and volume using this method?

A. The price is dependent on the volume B. It has a direct relationship between price and volume C. It has no relationship between price and volume D. It has an indirect relationship between price and volume

Discussion 0

Correct Answer: C Vote an answer

Question 13

What method could one utilize to analyze the long-term trends of futures prices, despite the fact that each contract is ONLY traded for several months?

A. Point and figure charts B. Continuation charts C. Equivolume charts D. Candlestick charts

Discussion 0

Correct Answer: B Vote an answer

Question 14

Why is it important to ignore opinions and focus on facts in market analysis?

A. Unexpected news does not get factored into the market B. Stock market news is more important than general news in determining the future direction of the markets C. General news reflects slowly unfolding economic and financial trends not yet discounted by the markets D. Opinions are not generally discounted by the market

Discussion 0

Correct Answer: C Vote an answer

CMT Association CMT Level II - CMT-Level-II Exam Practice Test