CMT Level 1 Exam (CMT-Level-I) Free Practice Test

Question 1

Central tendency is:

A. Another term for mean regression

B. A momentum indicator

C. The midpoint of a trading range

D. Another term for the average

Correct Answer: D

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Question 2

Calculate the nominal return based on the information provided below:
The S&P 500 index fell 0.003 percent in 2015.
Dividends paid during the year equaled 2.089 percent of the index's value.
Inflation was 3.4 percent.

A. -2.08%

B. -1.3%

C. 1.30%

D. 2.08%

Correct Answer: D

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Question 3

Oscillators are normally used to:

A. Gauge differentials between buyers and sellers

B. Identify overbought or oversold market conditions

C. Identify price/volume divergences

D. Identify Elliott Wave cycles

Correct Answer: B

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Question 4

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. Five-sixths

B. One-half

C. Two-thirds

D. Three-quarters

Correct Answer: D

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Question 5

The candlestick hammer pattern:

A. Need not be confirmed by other indicators

B. Comes after market rallies

C. Has a large real body

D. Has no lower shadow

Correct Answer: A

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Question 6

Volume divergences occur when:

A. Volume expands while open interest contracts

B. Volume declines during a sideways congestion pattern

C. A new high in an uptrend takes place on declining volume

D. Volume expands while the daily trading range contracts

Correct Answer: C

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Question 7

Which moving average(s) assign GREATER weight to the most recent data?

A. Exponential

B. Both B and C

C. Simple

D. Weighted

Correct Answer: B

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Question 8

Put-call parity refers to:

A. Equal volatility for an asset's puts and calls

B. The link between an asset's put and call premiums as they relate to the price of the underlying asset

C. Expected volatility of an asset based on its option premiums

D. Equality of premiums for an asset's puts and calls of the same strike and expiration

Correct Answer: B

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Question 9

Put call ratio is:

A. Market momentum indicator555657

B. Market sentiment indicator585960

C. Market breadth indicator

D. External Indicator for markets616263

Correct Answer: B

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Question 10

In a dark cloud cover candlestick pattern, which candle has the higher high?

A. The first candle

B. The second candle

C. It could be any

D. The third candle

Correct Answer: B

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Question 11

A breakaway gap usually:

A. Provides a major divergence signal

B. Occurs during the accumulation phase of the market cycle3738

C. Occurs at the end of an important price move3536

D. Signals the beginning of a new trend3334

Correct Answer: D

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Question 12

Venus saw the chart of Xeta technologies. The stock was between 25 and 32 for a period of six months. She drew two horizontal lines at these two levels. Today, the stock is trading at 35. The horizontal line at 32 represents _______ for the stock.

A. Resistance

B. It cannot be correctly decided unless the further move of the stock is watched

C. Support

D. Either resistance or support

Correct Answer: C

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CMT Association CMT Level 1 (CMT-Level-I) Free Practice Test