Free CMT-LEVEL-II Exam Braindumps
CMT Level II Exam Questions 111–115 (page: 24)

Updated On: 9-Feb-2026

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

  1. It centers on the premise that systemic risks in the financial markets can be diversified away.
  2. It is a 45 degree line plotting possible risk versus return
  3. It is a plot of the highest possible returns obtainable over a series of risk levels
  4. It is unrelated to the risk free rate

Answer(s): C



Intermarket analysis can be used for which investment decisions?

  1. Decisions among asset classes
  2. Decisions among equity market sectors
  3. Decisions among mutual fund
  4. All of the above

Answer(s): D



Which of the following is true for the use of the chi square test?

  1. Used as the main confirmation test in Dow Theory
  2. Compares risk to expected returns
  3. Compares actual returns to expected returns
  4. Signals moving average crossovers

Answer(s): C



Which of the following is NOT a valid volume interpretation technique?

  1. Remove volume associated with large price moves
  2. Remove low volume periods
  3. Utilize statistical techniques to predict prices based on volume
  4. Construct volume moving averages

Answer(s): A



The only effective method of diversifying a portfolio is by including asset classes with ________ correlation to stocks such as cash, foreign exchange or commodities.

  1. positive
  2. meaningful
  3. low/negative
  4. moderately positive

Answer(s): C



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