Question on Theory and Practical Charts

1 / 25

Utilizing _____ as a risk measure entails estimating potential price fluctuations in both directions

Implied Volatility

Plurality Index

Put/call parity

Standard Deviation

2 / 25

Among the following, which type of trader possesses influence but lacks significant intelligence and market knowledge?

Large Speculators

Crowd

Hedgers

Arbitragers

3 / 25

When a trader notices a breach of the outer boundary of a Bollinger Band, the most likely interpretation is

The current trend is expected to remain unchanged

Initiate a trade in the opposite direction of the breakout

A horizontal or sideways trend is anticipated

Enter the trade in the direction of the breakout

4 / 25

If the stock market achieves a new high while the Advance/Decline (A/D) line fails to reach its peak, it suggests that

With fewer stocks participating, the rally may be approaching its conclusion.

The market has the potential to extend its upward movement.

With a substantial number of stocks participating, the rally may be nearing its end.

With a broad participation of many stocks, the rally may still have room to continue.

5 / 25

The limit on the number of contracts as a speculator can hold at any given time in the markets is specified to as

Position limit

Speculator trading limit

Margin

Open interest

6 / 25

Which indicator among the following is utilized to determine whether a stock is underperforming the market or not?

Moving averages

Relative strength index

Divergence studies

Relative strength

7 / 25

What is the meaning of Price of money

It is difficult to earn money.

Interest rates charged on borrowed money to get price.

Inflation that changes the purchasing power of money.

Purchasing power money itself.

8 / 25

The primary leaders of market crowds are

A significant portion of market participants who engage in trading based on impulse

Large Institutional Investors

Momentum of the underlying

Price of a security

9 / 25

The Golden Cross describes the point when

The 50-day moving average crosses below the 200-day moving average.

Current price crosses above 50-day and 200-day moving averages.

The 50-day moving average crosses above the 200-day moving average.

Current price crosses below 50-day and 200-day moving averages.

10 / 25

An exponential moving average

Assigns greater importance to the latest observation

Assigns reduced significance to the most recent observation

All observations are treated with equal weight

Operates without any delay or lag in responsiveness

11 / 25

__________ influences the quantity of funds accessible to the economy and their associated costs.

Monetary policy

Credit policy

Economic policy

Investment policy

12 / 25

Which pair among the following signals the end of a bull market?

Trading volume is low and the vix dips below 15.

Populor stocks collapse while the broad market hits new high.

Small caps and fmcg stocks underperform the Nifty50.

Trading volume is high and everywhere people are talking about stock market.

13 / 25

The Advance/Decline line is calculated by

Subtracting the number of advancing stocks and unchanged stocks from declining stocks.

Subtracting the number of advancing stocks from declining stocks and ignoring unchanged stocks.

Subtracting the number of declining stocks from advancing stocks and ignoring unchanged stocks.

Subtracting the number of advancing stocks from declining stocks and adding back the unchanged stocks.

14 / 25

Identify the statement that inaccurately describes call and put options

Exercising an option initiates a transaction between an investor and the company that issued the stock

A put option grants the owner the right to sell stock shares at a specified price

Call and put options are speculative bets on the future movement of a stock

A call option gives the holder the right to buy a predetermined quantity of shares of a stock at a specified price

15 / 25

During the trade slippage is normally attributed to

Credit risk

Liquidity risk

Default risk

Market risk

16 / 25

The primary function of a channel line is to

Identify potential reversal points

Establish basic direction

Identify a trend reversal

Evaluate the likely direction of the trend.

17 / 25

Short covering in the futures market occurs when traders buy back previously sold positions to offset their short positions ?

Price increasing and open interest decreasing

Price decreasing and open interest decreasing

Price increasing and open interest increasing

Price decreasing and open interest increasing

18 / 25

In the stock markets, the only group consistently generating profits is

Large institutions

Small speculators

Company Insiders

Derivatives traders

19 / 25

A beta of 1.2 implies that the fund is likely to experience higher volatility or risk compared to the broader market

20% more volatility

20% less volatility

0.2% more volatility

2% more volatility

20 / 25

Typically, a breakaway gap occurs when

Indicates a significant divergence signal.

Takes place during the accumulation phase of the market cycle.

Occurs at the end of an important price move.

Signals the beginning of a new trend.

21 / 25

What constitutes the set of momentum or Rate of Change indicators?

Investor Sentiment

The change in price

Investor psychology

The rate of change in price

22 / 25

Which statement among the following accurately characterizes a support level?

A price level where the strength of buying is robust enough to halt or reverse a decline.

Tests of a support level are typically heralded by a prior price advance.

Price peaks often define a support point

A price level where the strength of selling is potent enough to disrupt or reverse an advance.

23 / 25

Breakouts from a rectangle pattern typically manifest when

Price encounters resistance at the pattern's boundaries

Price breaches the pattern's midpoint from above

Price concludes outside the pattern boundary

Price ascends above the pattern's midpoint

24 / 25

When utilizing RSI as an overbought/oversold indicator, a sell signal is triggered when

RSI dropping below its lower reference line and subsequently rebounding above it

RSI crossing above the midpoint (50 level)

RSI crossing below the midpoint (50 level)

RSI ascending beyond its upper reference line and subsequently crossing below it

25 / 25

Symmetrical triangles lasting less than three weeks are more likely to be classified as

Flags

Wedges

Pennants

Consolidations

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