Question 1

1. Dollar cost averaging is

   	a.	a means to insure a positive return
   	b.	a means to increase the average cost basis
   	c.	periodically buying a round lot of stock
   	d.	periodically investing a specified dollar amount in a stock

1 points

Question 2

1. The Dogs of the Dow strategy

   	a.	suggests buying the lowest priced Dow stocks
   	b.	outperforms the S&P 500
   	c.	suggests buying the Dow stocks with the highest dividend yields
   	d.	forecasts the direction of Dow Jones averages

1 points

Question 3

1. Which of the following is not used in technical analysis?

   	a.	bar graphs
   	b.	P/E ratios
   	c.	point-and-figure charts
   	d.	moving averages

1 points

Question 4

1. A point-and-figure chart such as an X-O chart tracks dividends and earnings.

   True

   False

1 points

Question 5

1. The Russell 1000 index

   	a.	uses the 1000 largest Nasdaq stocks
   	b.	is a broad measure of listed and Nasdaq stocks
   	c.	combines 1000 stocks and bonds
   	d.	is a broad-based measure of bonds

1 points

Question 6

1. A strategy of averaging down will be profitable if

   	a.	the price of the stock subsequently rises
   	b.	the price of the stock continues to fall
   	c.	the firm pays more dividends
   	d.	the firm retains earnings

1 points

Question 7

1. Movements in individual stock prices tend to be

   	a.	positively correlated with inflation
   	b.	negatively correlated
   	c.	positively correlated
   	d.	positively correlated with changes in interest rates

1 points

Question 8

1. Studies of investment returns suggest that investors can expect to earn at least 15 percent annually.

   True

   False

1 points

Question 9

1. If technical analysis cannot be demonstrated to produce higher returns, that is evidence supporting efficient markets.

   True

   False

1 points

Question 10

1. Dollar-cost averaging is achieved by periodic, equal dollar investments.

   True

   False

1 points

Question 11

1. According to the Ibbotson Associates studies of investment returns, larger stocks in the S&P earned higher returns than the smaller companies.

   True

   False

1 points

Question 12

1. If investors believe technical analysis, its predictions may become self-fulfilling.

   True

   False

1 points

Question 13

1. Empirical evidence

   	a.	does not support the use of technical analysis
   	b.	only supports head-and-figure charts
   	c.	cannot be applied to technical analysis
   	d.	does not support efficient markets

1 points

Question 14

1. Which of the following human emotions tend to affect investments decisions? 1. the pain of regret 2. following the crowd or