Strategy Intermediate:
Market Timing
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1.
When you sell short, you hope share prices will _______.
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Rise
Fall
Stay the same
Fall. You sell short to make money on the falling price of a security.
2.
Which of the following is a risk of the buy and hold strategy?
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High taxes
Low volatility
High volatility
Difficulty of management
High volatility. This could lead to heavy losses.
3.
Market timers try to buy high and sell low.
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True
False
False. Market timers try to buy low and sell high.
4.
The indicator that measures average data over time is called the ______.
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Buy signal
Open interest
Moving average
Moving average. A moving average covers a period of time.
5.
A mutual funds volatility may be reduced by market timing.
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True
False
True. When used skillfully, market timing can reduce a mutual funds volatility.
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