FIN 351 TEXT QUIZ CHAPTER 9

1. The ideas that stock prices tend to move in trends that persist for long periods and that these trends can
be detected in charts are basic assumptions of fundamental analysis.
True False
2. The support level is the stock price that generates new demand, while the resistance level is the price at
which investors begin to sell in order to take a profit.
True False
3. The Barron's Confidence Index is based on the premise that bond traders, being more sophisticated than
stock traders, pick up trends more quickly.
True False
4. Under normal circumstances, the Barron's confidence Index is between 100 and 200.
True False
5. Short selling by market specialists provides future demand potential to cover their short position.
True False

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