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Question 1 of 10
1. Question
Which of the following method is used to establish the relative strength? Choose the best possible answer.
Correct
The most popular means of calculating relative strength is called the process of proportioning. It’s simply the ratio of two investments, sectors, industry groups, averages, commodities, and so on, seeing which one outperforms the other.
Incorrect
The most popular means of calculating relative strength is called the process of proportioning. It’s simply the ratio of two investments, sectors, industry groups, averages, commodities, and so on, seeing which one outperforms the other.
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Question 2 of 10
2. Question
What can be deduced from the information that the line of the ratio is rising with regards to selection and decision making?
Correct
If the ratio line goes up, it simply shows that the stock in question is stronger than its industry average. Behavioral interpretations are similar to those employed in price and other oscillators. Analysis of divergence, trend lines, and even patterns appear in the lines of the relation.
Incorrect
If the ratio line goes up, it simply shows that the stock in question is stronger than its industry average. Behavioral interpretations are similar to those employed in price and other oscillators. Analysis of divergence, trend lines, and even patterns appear in the lines of the relation.
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Question 3 of 10
3. Question
Which of the following is not used in measuring relative strength with regards to selection and decision making?
Correct
There are several methods of relative strength measurement, the most popular being the percentage change, the alpha, the trend slope, and the Levy methods.
Incorrect
There are several methods of relative strength measurement, the most popular being the percentage change, the alpha, the trend slope, and the Levy methods.
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Question 4 of 10
4. Question
Which of the following correctly describes the term Lookback in the Percentage Change method used in measuring Relative Strength?
Correct
“Lookback” is the time span for measuring relative price power. The stocks were then sorted based on those exchange rates. They found the higher decile stocks kept being solid for the next three to ten months. Their review included big, capitalized and thinly capitalized stocks, as well as high-priced and low-priced ones.
Incorrect
“Lookback” is the time span for measuring relative price power. The stocks were then sorted based on those exchange rates. They found the higher decile stocks kept being solid for the next three to ten months. Their review included big, capitalized and thinly capitalized stocks, as well as high-priced and low-priced ones.
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Question 5 of 10
5. Question
What is the calculation of alpha for AAPL used to indicate? Choose the best option.
Correct
Comparing the alpha of AAPL with that of other stocks is a way of evaluating which are the highest and better investment candidates.
Incorrect
Comparing the alpha of AAPL with that of other stocks is a way of evaluating which are the highest and better investment candidates.
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Question 6 of 10
6. Question
What is the technical name used to define the intercept with the vertical axis used in the Alpha Method with regards to selection and decision making?
Correct
The line is expressed using the line’s slope, the beta, and the vertical intercept called the alpha. Thus every stock has an alpha and a beta over a given duration.
Incorrect
The line is expressed using the line’s slope, the beta, and the vertical intercept called the alpha. Thus every stock has an alpha and a beta over a given duration.
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Question 7 of 10
7. Question
What does the value of alpha represent in the alpha method of measuring the relative strength?
Correct
The alpha defines the meaning when the line of the regression goes through the 0 percent change in S&P and is, thus, a trend indicator compared to the S&P 500. MPT indicated high beta stocks would be more competitive but also riskier.
Incorrect
The alpha defines the meaning when the line of the regression goes through the 0 percent change in S&P and is, thus, a trend indicator compared to the S&P 500. MPT indicated high beta stocks would be more competitive but also riskier.
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Question 8 of 10
8. Question
In alpha method on what factor(s) is the stock’s price motion dependent upon?
Correct
In MPT, the alpha must always either approach or be close to zero, since technically there can be no systemic benefit from the market
(S&P 500) alone. In other words, the price movement of a stock is determined by beta, not alpha.Incorrect
In MPT, the alpha must always either approach or be close to zero, since technically there can be no systemic benefit from the market
(S&P 500) alone. In other words, the price movement of a stock is determined by beta, not alpha. -
Question 9 of 10
9. Question
In the alpha method, what does the high beta stock have an impact on the alpha factor regarding the selection and decision making?
Correct
The high beta stocks could also have negative alphas, suggesting their movements compared to the S&P could be downward, though more volatile.
Incorrect
The high beta stocks could also have negative alphas, suggesting their movements compared to the S&P could be downward, though more volatile.
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Question 10 of 10
10. Question
On which factors does the Gaussian distribution is based upon with regards to the statistical analysis? Choose the best possible answer.
Correct
Of all probability distributions, the most well-known is the normal distribution, also known as the Gaussian distribution. Because of its bell shape, it’s also known as the bell curve. It takes only two parameters — the mean and standard deviation.
Incorrect
Of all probability distributions, the most well-known is the normal distribution, also known as the Gaussian distribution. Because of its bell shape, it’s also known as the bell curve. It takes only two parameters — the mean and standard deviation.