CMT Association CMT Level 1 Sample Questions:

1. A company whose stock is in a well-established uptrend, reports earnings slightly above consensus estimates.
After an initial rally, the stock then ends lower on the day. This would probably be an example of:

A) Unrealistic expectations
B) Market discounting
C) Investor under-reaction
D) A short-coming of fundamental analysis

2. To increase the sensitivity of a 5 x 3 point & figure chart, one could:

A) Increase the number of boxes needed for a reversal
B) Increase the box size
C) Decrease the box size
D) None of the above would increase the sensitivity of a point and figure chart

3. Standard deviation is:

A) The square root of the variance
B) The average deviation
C) The covariance of two securities
D) A descriptive statistic which defines the central tendency

4. Trend lines:

A) Offer late confirmation of a change in trend
B) Are more significant the longer they stay in force
C) Are not useful for short-term trading
D) Can only be determined by least square regression method

5. An evening doji star candlestick pattern:

A) Has a doji in the first position
B) Has a doji in the last position
C) Is completely comprised of dojis
D) Has a doji in the middle position

Solutions: