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Questions # 1:

___________ is used for comparing the long-term performance of one system against another.

Options:

A.

Beta

B.

Sharpe Ratio

C.

Calmar ratio

D.

Treynor Ratio

Questions # 2:

The Sharpe Ratio is defined as?

Options:

A.

(expected return plus the risk free interest rate) divided by the standard deviation of returns

B.

(expected return minus the risk free interest rate) divided by the standard deviation of returns

C.

(expected return divided by the risk free interest rate) divided by the standard deviation of returns

D.

(expected return times the risk free interest rate) divided by the standard deviation of returns

Questions # 3:

The bias under which, when an event has not occurred recently, the event is perceived as having zero or negligible probability of occurring in future, is categorized as:

Options:

A.

Saliency bias

B.

Framing bias

C.

Sunk-cost bias

D.

Anchoring bias

Questions # 4:

Can stock prices be normally distributed and are stock returns normally distributed?

Options:

A.

No, you can not have negative prices and every number is possible with any normal distribution. Yes, stock returns are normally distributed

B.

Yes, you can not afford negative prices and with any usual distribution, any number is possible. No, stock returns are normally distributed

C.

Yes, you can not afford negative prices and with any usual distribution, any number is possible. Yes, stock returns are normally distributed

D.

No, you can not have negative prices and every number is possible with any normal distribution. No, stock returns are normally distributed

Questions # 5:

Allen Johnson, CMT, is working in the Singapore office of German Investment Corporation. From an informal conversation, Allen learns that the company's most recent annual report contains misappropriated

information. No one at the Singapore office expresses concern, however, because there has been no breach of Singapore's law. Barrett should:

Options:

A.

do nothing because the branch is outside of German jurisdiction.

B.

seek advice from the company counsel to determine appropriate action.

C.

do nothing because the branch is outside of Singapore's jurisdiction.

D.

disassociate himself from the case with a written report to his supervisor.

Questions # 6:

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

Options:

A.

Use of additional trend periods

B.

Increase the delay in taking action after a trade signal is given

C.

Utilize support and resistance lines

D.

Utilize candlestick charts instead of bar charts

Questions # 7:

Which is NOT true of the three advancing white soldiers' pattern?

Options:

A.

It is a gradual and steady rise

B.

Each real body opens within or near the prior session's real body

C.

It is composed of three white candles with successively higher closes

D.

Each candle should have a long upper shadow

Questions # 8:

Near the end of a recession:

Options:

A.

bonds turn up before stocks and commodities.

B.

stocks turn up before bonds and commodities.

C.

commodities turn up before bonds and stocks.

D.

all the asset classes turn up simultaneously.

Questions # 9:

A trend based trading system where the trend is the slope of a straight line found using a least squares regression:

Options:

A.

Point and figure

B.

Simple moving average

C.

Linear regression slope

D.

N-day breakout

Questions # 10:

What of the following could be utilized in a computerized trading system to improve the performance of Wilder's Parabolic System?

Options:

A.

Trend lines

B.

Stops

C.

Directional movement index

D.

Average divergence index

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