Labour Day Special 65% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: exams65

CMT Level II Exam Question and Answers

CMT Level II Exam

Last Update May 1, 2024
Total Questions : 262

We are offering FREE CMT-Level-II CMT Association exam questions. All you do is to just go and sign up. Give your details, prepare CMT-Level-II free exam questions and then go for complete pool of CMT Level II Exam test questions that will help you more.

CMT-Level-II pdf

CMT-Level-II PDF

$35  $99.99
 Add to Cart
CMT-Level-II Engine

CMT-Level-II Testing Engine

$42  $119.99
 Add to Cart
CMT-Level-II PDF + Engine

CMT-Level-II PDF + Testing Engine

$56  $159.99
 Add to Cart
Questions 1

A trend based trading system where signals occur when the current high or low price exceeds the previous high or low price:

Options:

A.  

Simple moving average

B.  

Point and figure

C.  

Swing breakout

D.  

N-day breakou

Discussion 0
Questions 2

Which of the following is the MOST important thing to keep in mind in attempting to find a perfect indicator?

Options:

A.  

Indicators do not take into account trading costs

B.  

Indicators optimized for the past often do not work in the present

C.  

Indicators are frequently so complex to create as to be of little use in making trading decision

D.  

Indicators usually give conflicting trading advice

Discussion 0
Questions 3

Which is the CORRECT interpretation of the candlestick hanging man pattern?

Options:

A.  

A hanging man always has a black real body

B.  

A hanging man comes after a market rally

C.  

A hanging man has no lower shadow

D.  

A hanging man need not be confirmed by other indicators

Discussion 0
Questions 4

Which of the following is a diversification technique in trading?

Options:

A.  

Trade multiple securities in markets with high correlation

B.  

Stick to a single trading system

C.  

Balance risk across multiple markets and trading systems

D.  

All of the above

Discussion 0
Questions 5

What would be the price objective for a head and shoulders pattern with a neckline at 63, top of the first shoulder at 72, top of the head at 96 and top of the second shoulder at 78?

Options:

A.  

10

B.  

96

C.  

48

D.  

30

Discussion 0
Questions 6

Based on the chart below, interpret the on balance volume (OBV) indicator with respect to price action:

Options:

A.  

Prices are consolidating but OBV direction has turned higher which indicates accumulation by long term traders.

B.  

Negative divergence between price and indicator suggest distribution is taking place at top.

C.  

Prices are higher but OBV is sideways which can't be interpreted.

D.  

Positive divergence between price and indicator suggest uptrend is weak and near reversal.

Discussion 0
Questions 7

Which of the following would NOT be true in designing a trading system utilizing bands?

Options:

A.  

Buy when prices penetrate the upper band

B.  

Close out longs when prices reverse and go below the center of the band

C.  

Close out shorts when prices reverse and go below the center of the band

D.  

Sell when price breaks below the lower band

Discussion 0
Questions 8

Extrapolation errors occur when investors:

Options:

A.  

assume that current and recent conditions will prevail well into the future, also causing them to ignore the evidence of changing circumstances.

B.  

tend to be overconfident regarding their abilities and make major mistakes like too little diversification and over trading.

C.  

are tricked into thinking that they can foretell the future because they can easily observe the past.

D.  

try to identify patterns in financial markets that do not exist.

Discussion 0
Questions 9

In point and figure theory, triple-tops and triple-bottoms, when breached:

Options:

A.  

Lead to smaller continuation patterns

B.  

Frequently leads to a consolidation phase

C.  

Will lead to a stronger directional move

D.  

Suggest a failure in the longer term pattern

Discussion 0
Questions 10

If we increase the sample size what effect does it have on the approximation/outcome of the statistical tests?

Options:

A.  

The approximation will decrease

B.  

The approximation will improve

C.  

It has no effect on the approximation

D.  

The approximation will not improve

Discussion 0
Questions 11

Which of the following is the BEST volume indicator for analysis of futures trading?

Options:

A.  

Open interest

B.  

Contract volume

C.  

Total volume

D.  

Breadth

Discussion 0
Questions 12

If a peak occurs prior to the halfway point of a cycle, this would be considered:

Options:

A.  

Left translation

B.  

Right translation

C.  

Inversion

D.  

Entropy

Discussion 0
Questions 13

Which of the following asset classes as a leading indicator for the stock market?

Options:

A.  

Bonds

B.  

Bullion

C.  

Precious metal

D.  

Energy

Discussion 0
Questions 14

Counterattack lines are formed when:

Options:

A.  

a doji breaks a moving average

B.  

a dumpling top fails with an abandoned baby pattern

C.  

when opposite colored candles have the same close

D.  

When same-colored candles have the same close

Discussion 0
Questions 15

In regards to cycle analysis, translation is:

Options:

A.  

Distance between troughs

B.  

Distance between peaks

C.  

Useful in checking where the trend direction is headed or if it is changing

D.  

To the left when the peak is beyond the halfway point

Discussion 0
Questions 16

Which would be the MOST useful aspect of a cycle in studying the relationship between cycles of different lengths?

Options:

A.  

Phase

B.  

Period

C.  

Amplitude

D.  

None of the above

Discussion 0
Questions 17

Which of the following is the formula for calculating RSI?

Options:

A.  

RSI = 100 - (100/(1 X RS))

B.  

RSI = 100 - (100/(100 + RS))

C.  

RSI = 100 - (100/(1 + RS))

D.  

RSI = 100 + (100/(1 + RS))

Discussion 0
Questions 18

Which of the following MUST be adhered to in published or written analytical reports?

Options:

A.  

Statements must be consistent with available evidence

B.  

Statements must be consistent with the accumulated knowledge of technical analysis

C.  

Statements may not indefensibly disparage the work of other analysts

D.  

All of the above

Discussion 0
Questions 19

Which of the following is one of the disadvantages of computerized trading systems?

Options:

A.  

Trading decisions are less consistent

B.  

Most computerized systems are unprofitable in non-trending markets

C.  

Profit trades are exited too early

D.  

Computerized systems miss many market trends

Discussion 0
Questions 20

Which of the following is NOT a basic principle of cycles?

Options:

A.  

Summation

B.  

Synchronicity

C.  

Harmonicity

D.  

Alternation

Discussion 0
Questions 21

When a market exceeds the high of the previous 4 weeks, cycle logic indicates that which of the following cycles has bottomed and turned up?

Options:

A.  

Seasonal

B.  

Long-term

C.  

Short-term

D.  

Intermediate-term

Discussion 0
Questions 22

Which of the following factors would increase the predictive power of an engulfing pattern?

Options:

A.  

The first day has a very long real body and the second day has a very short real body

B.  

The pattern appears after a consolidation pattern

C.  

There is heavy volume on the first day of the engulfing pattern

D.  

None of the above

Discussion 0
Questions 23

Which of the following would normally be considered a sentiment indicator that is most useful to traders?

Options:

A.  

Corporate buy backs

B.  

Price/earnings ratio

C.  

Insider buying

D.  

Put/call ratio

Discussion 0
Questions 24

Which of the following is true of volume and open interest?

Options:

A.  

Volume precedes price

B.  

On-balance volume is not as accurate measure of volume as basic volume column charts

C.  

Within an uptrend, a sudden leveling off or decline in open interest often signals that the current trend will accelerate

D.  

Decreases in volume and open interest help confirm the resolution of price patterns

Discussion 0
Questions 25

Which of the following is the reason behind choosing a logarithmic scale? Select the best possible answer.

Options:

A.  

When short periods of trading activity are plotted

B.  

When long or short periods of trading activity are plotted

C.  

When long periods of trading activity are plotted

D.  

When intervals of trading activity are plotted over a limited span

Discussion 0
Questions 26

A trend based trading system where signals occur when the current price reaches a new high or low:

Options:

A.  

Point and figure

B.  

Simple moving average

C.  

Swing breakout

D.  

N-day breakout

Discussion 0
Questions 27

Which is NOT a measure of central tendency:

Options:

A.  

Mean

B.  

Median

C.  

Mode

D.  

Variance

Discussion 0
Questions 28

Which of the following is NOT true of the three mountains and three rivers chart patterns?

Options:

A.  

They are longer-term tops and bottom patterns, respectively

B.  

The three mountains pattern is also known as a triple top or Buddha top

C.  

The three rivers patterns is also known as a triple bottom or inverted Buddha bottom

D.  

The color of the real bodies is of utmost importance to its significance

Discussion 0
Questions 29

If the upper breakout level is getting higher and higher along the upper trend line which of the following statement is not predicted correctly about this trend?

Options:

A.  

It using up much of any potential gain after a breakout

B.  

It is also moving farther from any realistic protective stop level

C.  

It is increasing the risk

D.  

It using up much of any potential gain just before a breakout

Discussion 0
Questions 30

Which one of the following most accurately describes the CFA Institute Standard about using material nonpublic information?

Options:

A.  

An analyst cannot use nonmaterial nonpublic information.

B.  

An analyst may use material nonpublic information as long as it is for his personal use.

C.  

An analyst may use material nonpublic information if it is legal in his country to do so.

D.  

An analyst may use nonmaterial nonpublic information as long as it has been developed under the Mosaic Theory.

Discussion 0
Questions 31

When using a two moving averages (MA. system, which of the following rules can be utilized to generate a buy signal?

Options:

A.  

Buy when the faster moving average crosses the slower moving average from above.

B.  

Buy when the faster moving average hooks the slower moving average from above.

C.  

Buy when the faster moving average hooks the slower moving average from below.

D.  

Buy when the current price crosses above both moving averages.

Discussion 0
Questions 32

Which of the following is most likely to occur when the overall market is deeply oversold and on the verge of reversing?

Options:

A.  

Lagging groups fail to confirm new lows

B.  

Leading groups fail to confirm new lows

C.  

Relative strength of lagging groups begins to improve

D.  

Leading groups make new lows and accelerate to the downside

Discussion 0
Questions 33

Which of the following points represents a valid island reversal in the chart below?

Options:

A.  

A

B.  

B

C.  

C

D.  

None of the above

Discussion 0
Questions 34

Allen Johnson, CMT, is working in the Singapore office of German Investment Corporation. From an informal conversation, Allen learns that the company's most recent annual report contains misappropriated

information. No one at the Singapore office expresses concern, however, because there has been no breach of Singapore's law. Barrett should:

Options:

A.  

do nothing because the branch is outside of German jurisdiction.

B.  

seek advice from the company counsel to determine appropriate action.

C.  

do nothing because the branch is outside of Singapore's jurisdiction.

D.  

disassociate himself from the case with a written report to his supervisor.

Discussion 0
Questions 35

What is the bearish counterpart to the Piercing Line candlestick pattern?

Options:

A.  

3 Black Crows

B.  

Dark Cloud Cover

C.  

Hanging Man

D.  

Shooting Star followed by an Inverted Hammer

Discussion 0
Questions 36

According to Charles Dow, what has been the main downfall of Wall Street investors?

Options:

A.  

Independent thinking

B.  

Failure to stay the course

C.  

Pride of opinion

D.  

Failure to abide by classic trading rules

Discussion 0
Questions 37

According to the raw performance statistics which of the following statements predicts the correct when the performance of a broadening pattern at its best and its failure rate?

Options:

A.  

At best, the performance of an expanding pattern is average, and its rate of failure is above average

B.  

At best, the performance of an expanding pattern is average, and its rate of failure is below average

C.  

At best, the performance of an expanding pattern is above average, and its rate of failure is above average

D.  

At best, the performance of an expanding pattern is below average, and its rate of failure is above average

Discussion 0
Questions 38

Which of the following is MOST often a reversal pattern:

Options:

A.  

Head and shoulders

B.  

Wedge

C.  

Triangle

D.  

Pennant

Discussion 0
Questions 39

Which of the following is NOT true of the Relative Strength Index

Options:

A.  

It is scaled from 0 to 100

B.  

It is more volatile than simple measures of momentum

C.  

It uses all the price values in a time period

D.  

It is frequently used to determine overbought and oversold levels

Discussion 0
CMT-Level-II Questions Answers | CMT-Level-II Test Prep | CMT Level II Exam Questions PDF | CMT-Level-II Online Exam | CMT-Level-II Practice Test | CMT-Level-II PDF | CMT-Level-II Test Questions | CMT-Level-II Study Material | CMT-Level-II Exam Preparation | CMT-Level-II Valid Dumps | CMT-Level-II Real Questions | CMT Program CMT-Level-II Exam Questions