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CMT Association CMT-Level-II Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Ethics and Professional Standards3%- CMT Code of Ethics
- Standards of Professional Conduct
Topic 2: Theory and History7%- Behavioral Finance Principles
- Key Concepts in Market Analysis
- Evolution of Technical Analysis
Topic 3: Application of Technical Analysis10%- Chart Interpretation for Entry/Exit Decisions
- Model Evaluation and Implementation
- Asset Allocation Using Relative Strength
- Risk Assessment and Planning
Topic 4: Advanced Techniques40%- Statistical Analysis Methods
- Systematic Trading Approaches
- Cross-Asset and Intermarket Analysis
- Risk Management Principles
- Volatility Analysis and Measures
Topic 5: Classical Techniques40%- Chart Types and Construction
- Internal and External Technical Indicators
- Trend Analysis and Confirmation
- Price and Volume Cycles
- Chart Pattern Recognition and Interpretation

CMT Association CMT Level II Sample Questions:

Question 1

Which of the following asset classes as a leading indicator for the stock market?

A. Bullion
B. Energy
C. Bonds
D. Precious metal


Question 2

Which of the following are FALSE statements when describing the Chaikin Money Flow Index?

A. It measures deviations of price within two standard deviations of the range.
B. Gaps will not be recorded, as the index only uses the day high, day low, and closing price.
C. The index will rise above zero in an upward trend
D. It suffers from the "drop off" effect, as it uses a simple moving average.


Question 3

Which of the following BEST characterizes the Theory of Contrary Opinion?

A. Always trade against the prevailing trend
B. When virtually everyone takes the position that the market is headed in a certain direction, there is no one left to push the trend any further
C. The future can be extrapolated based on present trends
D. Fundamental analysis is always wrong


Question 4

A technical analyst was at a convention in which a long-term point and figure stock chart was being discusseD. He noticed that low-price action did not appear as active as high-price action on the chart. One suggestion the technical analyst could provide, to clear up this apparent distortion, would be to:

A. Change the scale to arithmetic
B. Change the charting scale to logarithmic
C. Add the daily opening prices to provide a more visual benchmark of price changes
D. Increase the time frame on the chart


Question 5

A correlation coefficient of 0.75 between two variables suggests ______ relationship:

A. non-existent
B. low
C. extremely strong
D. strong


Solutions:

Question 1
Answer: C
Question 2
Answer: A
Question 3
Answer: B
Question 4
Answer: B
Question 5
Answer: D

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