CMT-Level-I Actual Questions 100% Same Braindumps with Actual Exam!
CMT-Level-I Study Material, Preparation Guide and PDF Download
The CMT-Level-I Exam is designed for individuals who are new to technical analysis and are looking to establish a strong foundation in this field. CMT-Level-I exam covers the basic principles and concepts of technical analysis, including charting techniques, technical indicators, and market analysis tools. It also tests candidates’ understanding of market cycles and the psychology of market participants.
NEW QUESTION # 230
The moving average:
- A. All of the above
- B. Lags market action
- C. Follows the trend
- D. Is a smoothing device
Answer: A
Explanation:
Detailed Explanation:
A moving average is constructed by averaging past data. Therefore:
* Itsmoothsout volatility.
* Itfollowsthe trend (does not predict it).
* It inherentlylagscurrent price action because it is based on historical data.
NEW QUESTION # 231
Which of the following is NOT an underlying assumption of technical analysis?
- A. Price discounts everything
- B. Prices move in trends
- C. The consensus is always wrong
- D. Supply and demand determines price
Answer: C
Explanation:
Detailed Explanation:
The three core assumptions of technical analysis (Dow Theory) are: 1) Prices move in trends, 2) Market action discounts everything, and 3) History repeats itself. While "contrarian investing" exists, the idea that
"the consensus is always wrong" is NOT a foundational assumption of technical analysis (in fact, trend following relies on the consensus being right for the duration of the trend).
NEW QUESTION # 232
An elongated impulse wave whose motive subwave is showing a total of nine subwaves. This type of wave is called:
- A. Extension
- B. Double wave
- C. Complex correction
- D. Motive wave
Answer: A
Explanation:
Detailed Explanation:
In Elliott Wave Theory, an Extension occurs when one of the impulse waves (usually 1, 3, or 5) becomes elongated and subdivides into its own 5-wave sequence. This often makes the standard 5-wave impulse look like a 9-wave structure (5 + 4 extra subwaves = 9).2021
NEW QUESTION # 233
In order for a Dow Theory sell signal to be confirmed:
- A. Both the DJI and DJT must break below an important intermediate term support level
- B. The DJI and DJT must fail to confirm at the highs
- C. B and C
- D. The Dow Jones Industrials (DJI) and the Dow Transports (DJT) must peak simultaneously
Answer: C
Explanation:
Detailed Explanation:
A Dow Theory sell signal requires two stages:
* Divergence (Non-confirmation):One average makes a new high while the other fails to do so (Option B).
* Break of Support:Subsequently,bothaverages must break below their previous secondary reaction lows (Option C).
NEW QUESTION # 234
In constructing a point and figure chart, a new box is added ONLY when:
- A. The price has moved by equal to or more than the specified box size
- B. The volume confirms the price movement
- C. The price has moved to a new high
- D. The price has moved by less than the specified box size
Answer: A
Explanation:
Detailed Explanation:
This reinforces the previous concept. If the box size is $1, a price move of $0.90 is ignored. The chart only updates when the price moves by equal to or more than the box size.
NEW QUESTION # 235
_______ provide investors with the option to swap debt for equity.
- A. Treasury bills
- B. Callable bonds
- C. Convertible bonds
- D. Putable bonds
Answer: C
Explanation:
Detailed Explanation:
Convertible bonds give the bondholder the right to convert the bond into a specified number of shares of the issuing company's common stock (equity) usually at a set price.114115
NEW QUESTION # 236
Which months generally have the best returns for stocks?
- A. October, November and January
- B. March, April and May
- C. January, February and March
- D. June, July and August
Answer: A
Explanation:
Detailed Explanation:
Stock market seasonality often exhibits a "Buy in November" pattern. The months of October, November, and January (and generally the winter months) are historically associated with the strongest returns, contrasting with the "Sell in May" period41.
NEW QUESTION # 237
In a head and shoulders pattern, volume usually:
- A. Is greatest in the middle leg
- B. Is constant throughout the pattern
- C. Increases with each successive peak
- D. Decreases with each successive peak
Answer: D
Explanation:
Detailed Explanation:
As the pattern develops from the left shoulder, to the head, and then to the right shoulder, the overall trend of volume is typically decreasing. The heavy buying dries up, indicating a loss of bullish conviction, which leads to the reversal.979899
NEW QUESTION # 238
Which of the following is CORRECT regarding the three black crows candlestick pattern?
- A. It occurs at a market bottom
- B. The three candles should close at or near their lows
- C. It is continuation pattern
- D. The three black candles do not have to be on consecutive trading periods
Answer: B
Explanation:
Detailed Explanation:
Three Black Crows is a bearish reversal pattern. It consists of three consecutive long black candles. For the pattern to be valid and show strong selling pressure, each candle should close at or near its low (short or no lower shadows).
NEW QUESTION # 239
Flow of fund analysis relies in part:
- A. On monthly price movements of the Dow Jones Industrial Average
- B. On the sentiment of investment advisory services
- C. On market volume statistics
- D. On measuring the cash position of different investor groups
Answer: D
Explanation:
Detailed Explanation:
Flow of funds analysis attempts to measure the capacity of different groups to buy or sell stocks. It relies on data such as mutual fund cash levels, margin debt, and institutional holdings-essentially measuring the cash position of investor groups to gauge potential future demand.
NEW QUESTION # 240
For a breakout or breakdown from a triangle to be considered valid it should occur NO MORE than _______ of the distance to the apex from the beginning of the pattern?
- A. Two-thirds
- B. Three-quarters
- C. One-half
- D. Five-sixths
Answer: B
Explanation:
Detailed Explanation:
According to standard technical analysis (Edwards & Magee), breakouts from triangles are most potent when they occur between two-thirds and three-quarters of the way to the apex. If prices trade into the apex (beyond
3/4), the pattern loses its potential energy, and the breakout is considered less significant or prone to failure.
NEW QUESTION # 241
Eagle Airways wants to sell some commercial instruments in order to generate funds. They have no intentions of buying them back but issue shares of the company to investors on a later date. What type of commercial instrument should they sell?
- A. Corporate notes
- B. Convertible bonds
- C. Putable Bonds
- D. Callable Bonds
Answer: B
Explanation:
Detailed Explanation:
Convertible Bonds allow the issuing company to borrow money (sell debt) initially, but the debt converts into shares (equity) at a later date. This matches the company's intention to issue shares later rather than paying back the cash principal.
NEW QUESTION # 242
Which of the following DOES NOT have a trader involved in selling?
- A. Options Market
- B. Futures Market
- C. Primary Market
- D. Secondary market
Answer: C
Explanation:
Detailed Explanation:
In the Primary Market (IPO), the securities are sold directly by the issuing company (via underwriters) to investors to raise capital. There is no "trader" involved in the selling side; the seller is the issuer. In secondary, options, and futures markets, the sellers are other traders/investors.
NEW QUESTION # 243
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. Market discounting
- B. A short-coming of fundamental analysis
- C. Investor under-reaction
- D. Unrealistic expectations
Answer: A
Explanation:
Detailed Explanation:
The market looks forward. If a stock is in an uptrend, the market has likely already anticipated (discounted) the good news. When the news is finally released, those who bought the rumor sell the fact. The price drop despite "good news" is a classic example of market discounting-the news was already priced in.
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NEW QUESTION # 244
The Advance/Decline line is calculated by:
- A. Subtracting the number of advancing stocks and unchanged stocks from declining stocks
- B. Subtracting the number of advancing stocks from declining stocks and ignoring unchanged stocks
- C. Subtracting the number of advancing stocks from declining stocks and adding back the unchanged stocks
- D. Subtracting the number of declining stocks from advancing stocks and ignoring unchanged stocks
Answer: D
Explanation:
Detailed Explanation:
The Advance-Decline (A/D) Line is a cumulative measure of market breadth. It is calculated by taking the number of advancing issues minus the number of declining issues each day and adding that net value to the previous day's cumulative total.
NEW QUESTION # 245
Which of the following is most likely to be considered a "material" piece of information regarding a company?
- A. The loss of a customer representing a significant portion of a company's gross sales
- B. A competitor CEO's speculation of a pending management change at the company
- C. The loss of a customer representing a negligible portion of a company's gross sales
- D. A former board member predicting a long-term decline in the company's stock
Answer: A
Explanation:
Detailed Explanation:
Information is material if its disclosure would likely affect the price of the security or if a reasonable investor would want to know it before making an investment decision. The loss of a customer representing a significant portion of sales would clearly impact earnings and the stock price.
NEW QUESTION # 246
The body of the candlestick line displays the relationship between:79
- A. The current session's high and low80
- B. The current session's close and the prior session's close81
- C. The current session's open and high82
- D. The current s83ession's open and close
Answer: D
Explanation:
Detailed Explanation:
The "Real Body" of a Japanese candlestick represents the range between the Opening price and the Closing price. If the Close is higher than the Open, the body is white/green (bullish). If the Close is lower, it is black
/red (bearish).8485
NEW QUESTION # 247
What is the measuring objective for a symmetrical triangle bar chart formation?
- A. The apex price
- B. The width of the triangle added to the breakout point
- C. The base distance added to the breakout point
- D. The range of the move preceding the triangle added to the breakout point
Answer: C
Explanation:
Detailed Explanation:
The standard measuring technique for a symmetrical triangle is to measure the height of the base (the widest part of the triangle at the start) and add/subtract that distance to/from the breakout point19.
NEW QUESTION # 248
Which of the following statements is CORRECT regarding the Stochastic Oscillator?
- A. It examines the most recent closing price as a percentage of the price range over a window of time
- B. It moves in the same direction as the Williams %R indicator
- C. It works best in a trending market, when it confirms the direction of the primary trend
- D. It is not as sensitive to recent price action as other indicators like Rate of Change
Answer: A
Explanation:
Detailed Explanation:
This is the definition of the Stochastic calculation. It measures where the current closing price stands relative to the high-low range over a specific lookback period (window of time).
NEW QUESTION # 249
Technicians refer to the speed of price movement as:
- A. Volume
- B. Ratio of two prices
- C. Trend
- D. Slope or momentum
Answer: D
Explanation:
Detailed Explanation:
Momentum measures the rate of change or the velocity of price movement. Geometrically, on a chart, this is represented by the slope of the trend18181818.
NEW QUESTION # 250
The January Effect is:
- A. Has not worked well in recent years
- B. As the S&P goes in January, so goes the year
- C. B and C
- D. When small cap stocks are more likely to outperform the market
Answer: C
Explanation:
Detailed Explanation:
The January Effect is the historical tendency for small-cap stocks to outperform large-cap stocks in January (tax-loss harvesting rebound) (Option B). However, as markets have become more efficient, this anomaly has diminished or shifted, meaning it has not worked well in recent years (Option C).179180181
NEW QUESTION # 251
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The CMT-Level-I exam is a rigorous test of technical analysis knowledge and skills. Candidates who pass the exam demonstrate a strong understanding of technical analysis concepts and principles, as well as the ability to apply them in real-world situations. CMT-Level-I exam is recognized as a valuable credential in the finance industry, and passing the exam can enhance career prospects and earning potential.
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