CMT-Level-II by CMT Association Valid Free Exam Practice Test

Question 1

Identify the following assumption under the correlation coefficient:

A. All of the above B. Outliers and homoscedasticity C. Normality D. Linearity

Correct Answer: A

Question 2

Which of the following is true of the window pattern?

A. It is a reversal pattern B. One should buy on dips after a falling window C. It occurs when the shadows of two consecutive candles do not overlap D. It occurs when the real bodies of two consecutive candles do not overlap

Correct Answer: C

Question 3

According to the raw performance statistics which of the following statements predicts the correct when the performance of a broadening pattern at its best and its failure rate?

A. At best, the performance of an expanding pattern is below average, and its rate of failure is above average B. At best, the performance of an expanding pattern is average, and its rate of failure is below average C. At best, the performance of an expanding pattern is above average, and its rate of failure is above average D. At best, the performance of an expanding pattern is average, and its rate of failure is above average

Correct Answer: D

Question 4

What is the measuring objective for a symmetrical triangle formation?

A. Both A. and B. are valid techniques B. A trendline from the top of the pattern parallel to the lower trendline C. The height of the base of the triangle D. Neither A. nor B. is a valid technique

Correct Answer: A

Question 5

A trend-based trading system where the trend is the average of a pre-determined number of previous days' (n) closing prices is:

A. Point and figure B. Linear regression slope C. Simple moving average D. N-day breakout

Correct Answer: C

Question 6

Which of the following methods is not used to portray the volume of trade?

A. Leaf and stem B. Bar/candle C. Equivolume D. Point-and-Figure

Correct Answer: A

Question 7

If a peak occurs prior to the halfway point of a cycle, this would be considered:

A. Inversion B. Left translation C. Entropy D. Right translation

Correct Answer: B

Question 8

Which of the following are valid interpretations of the put-call ratio?

A. All of the above B. Extreme levels are trading signals C. It is used as a contrary indicator D. It is the major sentiment index used for options trading

Correct Answer: A

Question 9

Which of the following is the CORRECT order of the Industrial Life Cycle?

A. Innovation, Maturity, Decay and Consolidation B. Innovation, Maturity, Consolidation and Decay C. Innovation, Consolidation, Maturity and Decay D. Innovation, Consolidation, Decay and Maturity

Correct Answer: C

Question 10

Which of the following statement is not true about the Diamond Top with regards to pattern analysis?

A. It consists of a combination of a broadening pattern and a symmetrical triangle B. It occurs at the top of a very sharp upward rise in prices C. It is not rare at price bottoms D. It is a profitable pattern

Correct Answer: C

Question 11

Speculative stocks put on their best performance in which of the following markets?

A. Near the final stages of a bull market. B. During the whole bull market C. Both in the beginning and at the end of a bull market D. At the early stages of a bull market.

Correct Answer: A

Question 12

Which of the following is NOT a basic principle of cycles?

A. Synchronicity B. Harmonicity C. Alternation D. Summation

Correct Answer: C

Question 13

Which of the following is a CORRECT usage of oscillators in technical analysis?

A. All of the above B. Oscillators are least useful when they reach an extreme reading near the upper or lower ends of their boundaries C. Divergences between price and oscillators are important confirmation signals D. When an oscillator crosses the zero line, it provides an important trading signal in the direction of the trend

Correct Answer: D

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