Flashcards in Final Exam Deck (34):

1

## Trin statistic, put/call ratio, and short interest are _____ indicators

### sentiment

2

## Relative strength and market breadth are ____ indicators

### technical

3

## Moving averages are _____ indicators

### trend

4

## Following a period of falling prices, the moving average will

### be above the current price

5

## A moving average of stock prices is

### less volatile than the actual prices

6

## if investors overweight recent performance in forecasting the future, they are exhibiting

### representativeness bias

7

## A trin ratio of greater than 1 is considered a

### bearish signal

8

## contrarian investors consider a high put/call ratio a

### bullish signal

9

## a trin statistic of less than 1 is considered a

### bullish signal

10

## If you are not a contrarian, you consider a high a put/call ratio to be a

### bearish signal

11

## During a period when prices have been rising, the ______ will be ______ the current price.

### moving average; below

12

## trend analysts who follow bonds are most likely to monitor the

### confidence index

13

## Floating rate bonds have a _____ that is adjusted with current market interest rates

### coupon rate

14

## the primary difference between treasury notes and bonds is

### maturity at issue

15

## synthetically created zero-coupon bonds

### STRIPS

16

## Inflated indexed Treasury securities are commonly called

### TIPS

17

## Everything else equal, the ____ the maturity of the bond and the ____ the coupon, the greater the sensitivity of the bond's price to interest rate changes.

### longer; lower

18

## A ______ bond gives the issuer an option to retire the bond before maturity at a specific price after a specific date.

### callable

19

## A ______ bond gives the bondholder the right to cash in the bond before maturity at a specific price after a specific date.

### puttable

20

## which bond would you most likely sell at lowest yield

### puttable mortgage bond

21

## You can be sure that a bond will sell at a premium to par when its coupon rate is _____ than its _______

### greater; yield to maturity

22

## Because of convexity, when interest rates change, the actual bond price will _______ the bond price predicted by duration

### always be higher than

23

## A bond's price volatility _______ at ______ rate as maturity increase

### increases; a decreasing

24

## all else equal, bond price volatility is greater for

### lower coupon rates

25

## All else equal, a bond's duration is

###
lower when the yield to maturity is higher

lower when the coupon rate is higher

26

## the exchange of one bond for a bond that has similar attributes but is more attractively priced is called

### substitution swap

27

## In a pure yield pickup swap, ____ bonds are exchanged for ____ bonds

### shorter-duration; longer-duration

28

## when interest rates increase, the duration of a 20 yr bond selling at a premium

### decreases

29

## bond with greatest price volatility

### low coupon and a long maturity

30

## you have an investment horizon of 6 years. bond with duration of 10 years. realized rate of return will be larger than the promised yield on the bond if interest rates

### fall

31

## you have an investment horizon of 6 years. bond with duration of 4 years. realized rate of return will be larger than the promised yield on the bond if interest rates

### increase

32

## P/E ratios tend to be _____ when inflations is _____

### higher;lower

33

## the constant-growth dividend discount model (DDM) can be used only when the growth rate is

### less than the required return

34