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  1. Home
  2. CMT Association Certification
  3. CMT-Level-I Exam
  4. CMTAssociation.CMT-Level-I.v2026-02-07.q111 Dumps
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Question 61

In trend-based trading systems, what is the major determinant of trading activity (i.e., how often buy or sell signals are generated)?

Correct Answer: B
Detailed Explanation:
The speed of the trend parameter (e.g., a 10-day moving average vs. a 200-day moving average) determines the frequency of trades. A faster trend speed generates more signals (more activity); a slower trend speed generates fewer signals13131313.
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Question 62

Typical borrowing by the government by selling bills is for the period:9899

Correct Answer: A
Detailed Explanation:110111
Treasury Bills (T-Bills) are short-term debt instruments with maturities of one year or less (typically 4, 8, 13,
26,112 or 52 weeks). Notes are 2-10 years, and Bonds are >10 years.113
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Question 63

Franklin Brown, CMT, is golfing with the CEO of Diamond Forest Company. The CEO tells Brown, "I will not be able to play golf next week because I will be traveling to investigate Southern Forest Company. We are considering a hostile takeover of Southern Forest and I need to gather more information." Two weeks later, Brown decides to buy the Southern Forest Company for his client accounts, but not for his personal account.
Four weeks later, Diamond Forest engages in a hostile takeover and the Southern Forest stock rises by 30%.
With respect to the MTA Code of Ethics, Brown's actions:

Correct Answer: A
Detailed Explanation:
The information about the hostile takeover was material non-public information (insider information). Using this information to trade, whether for a personal account or for client accounts, is a violation of the Code of Ethics and securities laws. The fact that it benefited clients does not make it ethical5555.
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Question 64

The primary use of candlestick patterns is to:

Correct Answer: C
Detailed Explanation:
Candlestick patterns (like Dojis, Hammers, Engulfing patterns) are primarily used as short-term signals to strengthen the probability of an impending reversal or to confirm the continuation of the current move. They are rarely used in isolation to define long-term primary trends.
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Question 65

Eagle Airways wants to sell some commercial instruments in order to generate funds. They have no intentions of buying them back but issue shares of the company to investors on a later date. What type of commercial instrument should they sell?

Correct Answer: C
Detailed Explanation:
Convertible Bonds allow the issuing company to borrow money (sell debt) initially, but the debt converts into shares (equity) at a later date. This matches the company's intention to issue shares later rather than paying back the cash principal.
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