Online Access Free CMTAssociation.CMT-Level-II.v2022-02-24.q87 Practice Test (Page 14)

CMT-Level-II Exam Question 61

Which of the following is true of the Efficient Frontier concept in modern portfolio theory?

A.It is unrelated to the risk free rate

B.It is a 45 degree line plotting possible risk versus return

C.It is a plot of the highest possible returns obtainable over a series of risk levels

D.It centers on the premise that systemic risks in the financial markets can be diversified away.

CMT-Level-II Exam Question 62

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

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

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

C.They are longer-term tops and bottom patterns, respectively

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

CMT-Level-II Exam Question 63

Extrapolation errors occur when investors:

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

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

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

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

CMT-Level-II Exam Question 64

How might one detrend data to determine if a cycle exists?

A.Plot a linear regression line through the data midpoin

B.Divide the current prices by a moving average of those prices

C.Create an oscillator that plots a standard deviation of the period lows

D.Apply volume weighting to both high and lows in the data

CMT-Level-II Exam Question 65

Adam Green, a portfolio manager, is making a presentation to a prospective client. Green says that as a new portfolio manager, he made an average annual rate of return of 40% in the last two years at his previous firm and that based on this, he can guarantee a 40% return to the client. Which of the following statements is in accordance with Standard III(D), Performance Presentation?

A.Implying that he can guarantee a return.

B.Stating his past performance as long as it is fact.

C.Imputing his past performance to future performance.

D.Implying that he can guarantee a return based on just 2 years of performance.

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CMT-Level-II Exam Question 61

CMT-Level-II Exam Question 62

CMT-Level-II Exam Question 63

CMT-Level-II Exam Question 64

CMT-Level-II Exam Question 65

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