Fundamental and Technical Analysis Flashcards
7 cards from real CSC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fundamental and Technical Analysis flashcards as text
Which approach to stock analysis begins by evaluating broad macroeconomic conditions before examining individual companies?
Answer: Top-down analysis
Top-down analysis starts with the macroeconomy, narrows to sectors, then selects individual stocks, moving from the general to the specific.
The Efficient Market Hypothesis (EMH) in its semi-strong form states that stock prices reflect:
Answer: All publicly available information
Semi-strong EMH holds that prices incorporate all publicly available information, making fundamental and technical analysis unable to generate consistent excess returns.
In technical analysis, Bollinger Bands widen when:
Answer: Market volatility increases
Bollinger Bands are based on standard deviation; when volatility rises, the bands widen, and when volatility is low, the bands contract.
When performing comparable company analysis, an analyst would most likely use which multiple to value a company with no positive earnings?
Answer: EV/EBITDA or EV/Revenue
EV/Revenue or EV/EBITDA multiples are used when a company has negative earnings, since a P/E ratio is meaningless with no positive net income.
A 'golden cross' is considered a bullish signal because it indicates:
Answer: The short-term moving average has crossed above the long-term moving average
A golden cross occurs when the 50-day moving average crosses above the 200-day moving average, signaling strengthening upward momentum.
In fundamental analysis, 'normalized earnings' are earnings that have been adjusted to remove:
Answer: One-time or non-recurring items to reflect sustainable profitability
Normalized earnings strip out extraordinary or one-time items (gains, write-offs, restructuring charges) to show the underlying, repeatable earnings power.
The 'advance-decline line' is a technical market breadth indicator that measures:
Answer: The cumulative difference between advancing and declining issues
The advance-decline line tracks the cumulative net number of advancing minus declining stocks, revealing whether a market move is broad-based or narrow.