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CMT Association CMT Level II Sample Questions:
1. Which of the following would normally be considered a sentiment indicator that is most useful to traders?
A) Price/earnings ratio
B) Corporate buy backs
C) Put/call ratio
D) Insider buying
2. A breakout:
A) Occurs when price passes through specific levels
B) Needs to be confirmed by other indicators
C) Has no significance to a trader of investor
D) Is a minor pattern which is rarely seen and has no real significance on either the near or long term
3. Based on the chart given below; identify the best course of action:
A) Shares are making a series of higher highs and higher lows; ROC has turned negative which is confirming the price action; should use current pullback to add to position.
B) Shares are losing momentum which can be confirmed by negative divergence between price and ROC; trader should be cautious and be quick to reduce position on a violation of trendline.
C) Negative divergence observed between price and ROC should be ignored as prices are near life time highs.
D) ROC has turned negative which is a sell signal; should initiate a short position.
4. 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?
A) Intermediate-term
B) Short-term
C) Long-term
D) Seasonal
5. Which market tends to have the GREATEST amount of volatility?
A) Eurodollars
B) Equities
C) Bonds
D) Currencies
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: C | Question # 5 Answer: B |

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