Unit 13 - Asset Allocation and Modern Portfolio Theory
Proponents of which of the following technical theories assume that small investors are usually wrong? A.) Odd lot B.) Volume of trading C.) Breadth of market D.) Short interest
A.) Odd lot
If the assets of a company did not change, but stockholders' equity declined, it follows that A.) liabilities increased. B.) liabilities declined. C.) capital surplus decreased. D.) retained earnings increased.
A.) liabilities increased.
The visible supply includes all of the following except A.) municipal notes. B.) industrial development bonds. C.) general obligation bonds. D.) revenue bonds.
A.) municipal notes. Short-term notes are not part of the visible supply
Municipal bonds offered for sale in the new issue market can be found in A.) the bond buyer B.) the Investors Business Daily C.) the Revdex D.) the electronic OTC pink
A.) the bond buyer
Which of the following is defined as profits after taxes and interest paid, less preferred dividends, divided by the number of shares of outstanding common stock? A.) Price to earnings B.) Earning per share (EPS) C.) Cash flow per share D.) Book value per share
B.) Earning per share (EPS)
Buying stocks with high price-to-earning (P/E) ratios normally reflects which of the following investment styles? A.) Special situations B.) Growth C.) Turnaround D.) Value
B.) Growth
If ALFA Securities, a broker-dealer, is a position-trading firm, which of the following statements is true? A.) It is violating NYSE rules. B.) It is trading for its own account. C.) It is underwriting securities in the primary market. D.) It is acting as a broker for customers.
B.) It is trading for its own account. Position trading is simply trading as principal or dealer for a firm's own account
Market timing is normally associated with which of the following portfolio management styles? A.) Passive management B.) Tactical asset allocation C.) Modern portfolio theory D.) Strategic asset allocation
B.) Tactical asset allocation
A moderately risk averse investor is best describes as an individual who A.) invests solely in risk-free investments B.) prefers investments with less risk to those with more risk even if the riskier one offers a higher potential return C.) chooses a relatively narrow portfolio concentrated in a limited number of issues D.) limits investments to those with a beta below 1.0
B.) prefers investments with less risk to those with more risk even if the riskier one offers a higher potential return
Balance sheets contain A.) the amount of cash and cash equivalents expended during the first half of the fiscal year as opposed to the second half. B.) the net worth of the firm as of the date of the balance sheet. C.) no reference to the accounting methods used to construct the balance sheet. D.) gross revenues for the year.
B.) the net worth of the firm as of the date of the balance sheet.
According to the Dow theory, reversal of a primary bullish trend must be confirmed by A.) the duration of the secondary movements. B.) the advance/decline line. C.) the Dow Jones Industrial Average and Transportation Average. D.) five consecutive days of upward price trends
C.) the Dow Jones Industrial Average and Transportation Average.
If a husband makes a gift of $100,000 to his wife, a U.S. citizen, how much of the gift is subject to gift taxes? A.) $100,000 B.) $90,000 C.) $50,000 D.) $0
D.) $0 Interspousal gifts to citizens of the United States, regardless of amount, are not subject to gift taxes.
If XYZ common stock has a $4 dividend, a yield of 4.2%, a P/E ratio of 12, and it is trading at $96, its approximate earnings per share is A.) $4.00 B.) $50.40 C.) $48.00 D.) $8.00
D.) $8.00 96/12 = 8
Which of the following are likely to have a low beta? A.) Technology stocks B.) Software stocks C.) Aerospace stocks D.) Public utility stocks
D.) Public utility stocks
All of the following are liquidity measure except A.) Annual dividends per share divided by earning per share B.) Current assets minus inventory divided by current liabilities C.) Cash equivalents and receivables divided by current liabilities D.) Current assets divided by current liabilities
A.) Annual dividends per share divided by earning per share
A technical analyst is least concerned with A.) declaration of increased dividends. B.) trading volume. C.) open short positions. D.) new highs and lows.
A.) declaration of increased dividends.
A profitable company distributes 70% of its earning in the form of cash dividends. What is the effect on the balance sheet of the 30% earnings are not distributed A.) an increase to capital surplus B.) an increase to retained earnings C.) decrease to retained earnings D.) decreased to capital surplus
B.) an increase to retained earnings
An investor's portfolio has a beta coefficient of 0.85. If the overall market declined by 10% over the course of a year, the portfolio's value has likely A.) increased by 8.5%. B.) decreased by 8.5%. C.) decreased by 11.76%. D.) increased by 10.85%.
B.) decreased by 8.5%.
A corporation has a net income of $5.2 million after taxes. If 4 million shares of common stock are outstanding, the earnings per share (EPS) is A.) $5.20. B.) $0.80. C.) $1.30. D.) $1.78.
C.) $1.30. 5.2/4 = 1.3
FINRA's 5% markup policy does not apply to A.) REITs. B.) commissions. C.) issues sold by prospectus. D.) third-market trades.
C.) issues sold by prospectus.
Reasons to suggest that your customers name a beneficiary for their accounts would include all of the following except A.) ensuring the property goes to the proper person B.) avoiding probate C.) saving income taxes D.) the assets generally get into the hand of their heir(s) without delay
C.) saving income taxes
All of the following are true of stockholder's equity except A.) that is also called net worth B.) that it consists of stock issued, capital surplus, and retained earnings C.) that it is carried as an asset on the balance sheet D.) that it is reflected in the book value of the stock
C.) that it is carried as an asset on the balance sheet
On January 18, your customer sold 500 shares of MNO for a loss of $5 per share. If on March 1 she bought 3 MNO calls, how much of the loss could she declare for tax purposes? A.) $2,500 B.) None C.) $1,000 D.) $1,500
A.) $2,500 Purchase was more than 30 days after the sale
ABC, with 3 million shares outstanding, reports after-tax earning of $7.5 million. Annual cash dividends total $1 per share. The dividend payout ratio is A.) 40% B.) 25% C.) 33% D.) 20%
A.) 40% $1 • 3 million = $3 million $3 million / $7.5 million = 40%
Which of the following balance sheet items is not a current liability? A.) Mortgages B.) Long-term debt amount that is due within one year C.) Accrued taxes D.) Account payable
A.) Mortgages
ALFA Enterprises pays a quarterly dividend of $0.15 and has earning per share of $2.50. What is the dividend payout ratio? A.) 6.25% B.) 30% C.) 25% D.) 14.40%
C.) 25% 0.15• 4 = 0.6 0.6/2.4 = 25%
The cost of the asset is $100,000 and will be depreciated on a straight-line basis with no salvage value. This means that A.) for the next five years the company will issue a check to the manufacturer for $20,000 B.) at the end of five years the company will have $100,000 to reserve to put put toward the purchase of a replacement C.) for the next five years the company will issue a check to the depreciation account for $20,000 D.) for the next five years the company will have an operating expense deduction of $20,000
A.) for the next five years the company will issue a check to the manufacturer for $20,000
A corporation buys back its stock on the open market for all of the following reason except A.) it reduce interest charges B.) to use it for future acquisitions C.) to use it for stock options D.) to increase earnings per share
A.) it reduce interest charges It reduces the total dividends paid
If stock market indexes, such as the S&P 500 and the Dow Jones Industrial Average, are advancing daily, and the number of advancing stocks relative to declining stocks is falling, a technical analyst will conclude that the market is A.) overbought. B.) unstable. C.) becoming volatile. D.) oversold.
A.) overbought.
An analyst observes that the beta of a traded security is 1.3, the market return is 6%, and the risk-free (RF) rate is 1%. The analyst forecasts that the security will return 7% over the next year. Based on these assumptions, the security is A.) overvalued, because the required return exceeds the forecasted return B.) undervalued, because the forecasted return exceeds the required return C.) overvalued, because the forecasted return exceeds the required return D.) undervalued, because the required return exceeds the forecasted return
A.) overvalued, because the required return exceeds the forecasted return The CAPM required return equals the risk free rate plus the security's beta times (the forecast market return minus the RF rate) 0.01 +1.3(0.06-0.01) = 0.075 = 7.5% According to the analyst's estimates, the security is overvalued because the forecasted return 7% is less than the required return (7.5%)
The bond placement ratio, as shown in The Bond Buyer is computed by taking A.) the number of new issues unsold divided by the new issues offered B.) the dollar amount of new issues sold divided by the dollar amount of new issues unsold C.) the dollar value of new issues sold divided by the dollar amount of the new issues offered D.) number of new issues divided by the 30-day visible supply
C.) the dollar value of new issues sold divided by the dollar amount of the new issues offered
If ALFA securities, a broker-dealer, is a position-trading firm, which of the following statement is true? A.) It is underwriting securities in the primary market B.) It is violating NYSE rules C.) It is acting as a broker for customers D.) It is trading for its own account
D.) It is trading for its own account
The capital asset pricing model (CAPM) assumes A.) that those who participate in smaller transactions are generally wrong regarding timing purchases and sales B.) that no type of risk can be diversified away C.) that prices are influenced by supply and demand only D.) investors are averse to risk and expect to be rewarded for taking risk
D.) investors are averse to risk and expect to be rewarded for taking risk
Progressive taxes would include I. Personal income tax II. Gift Taxes III. Estate taxes IV. Excise taxes A.) I, II, and III B.) I and III C.) I and II D.) II, III, and IV
A.) I, II, and III Excise taxes (fuel and transportation tax) are a fixed rate => not progressive
Which of the following choices best describes the formula to determine earning per share? A.) [EBIT - (interest + taxes)] - preferred dividends] divided by the number of shares of common outstanding B.) Retained earning divided by the number of shares of common issued and outstanding C.) (Net Income + Preferred Dividends) divided by (the number of shares of common issued - the number of shares of treasury stock) D.) (Net income - preferred dividends) divided by the number of shares of common authorized
A.) [EBIT - (interest + taxes)] - preferred dividends] divided by the number of shares of common outstanding
If XYZ Corporation sells an additional 1 million common stock with a par value of $1 for $10 per share, which of the following is true? A.) Its earnings per share will increase B.) Its paid-in surplus will increase C.) Its liquidity ratio will decrease D.) The current ratio will decrease
B.) Its paid-in surplus will increase Paid-in surplus is a balance sheet entry that accounts for money raised from the issuance of stock in excess of par value. When more shares are sold, paid-in surplus will increase
When a company issues additional bonds, which of the following is true? A.) Leverage is not affected when debt securities are issued B.) Leverage is increased C.) It cannot be determined by only knowing that additional bonds have been issued D.) Leverage is decreased
B.) Leverage is increased
One of your customers notices that the short interest on the NYSE is high. When she asks you for an interpretation, you should tell her that this signals A.) a period of volatility in the market. B.) a period of stability in the market. C.) a bullish market. D.) a bearish market.
C.) a bullish market.
If a customer sold 1,000 shares of XYZ at a loss, a wash sale within 30 days of the date of sale if your customer A.) writes 10 XYZ at the money puts B.) writes 10 XYZ at the money calls C.) buys 10 XYZ at the money calls D.) buys 10 XYZ at the money puts
C.) buys 10 XYZ at the money calls
An investor purchased 100 shares of Wilmont Auto Supply Holdings (WASH) on June 1 2018 at $55 per share. On July 4 2019 WASH is trading at $40 per share and the investor sells them at the market price. On August 1, 2019 the investor purchases a WASH Jan 40 call @ 4. If there are no other transactions during 2019, the investor's tax consequences are A.) not able to be determined until we know the disposition of the option B.) $1500 short term loss because the option was purchased less than 30 days after the sale erasing the holding period C.) no taxable loss for 2019 because of the wash sale rule D.) $1500 long-term loss with no wash sale because the stock was long term before the purchase of the option
C.) no taxable loss for 2019 because of the wash sale rule
A fundamental analyst would be interested in all of the following except A.) working capital. B.) corporate regulatory filings. C.) reversals. D.) debt-to-equity ratios.
C.) reversals. * reversals are a fundamental economic value -> not what fundamental analyst look at
Which of the following provides a measurement of the volatility of a particular stock or portfolio, as compared to the volatility of the market as a whole? A.) Alpha B.) Delta C.) Duration D.) Beta
D.) Beta
Which of the following balance sheet entries may be affected when a company pays a cash dividend? I. Shareholders' equity II. Total assets III. Total liabilities IV. Working capital A.) I and IV B.) I and III C.) II and IV D.) II and III
D.) II and III
When a company issues additional preferred stock and bonds, which of the following will be the net result? A.) It is impossible to tell without the specific amounts of equity and debt issued. B.) Leverage is decreased. C.) Leverage is not affected because one issue is equity, the other is debt, and the net effect on leverage is zero. D.) Leverage is increased.
D.) Leverage is increased.
A fundamental analyst would be interested in all of the following except A.) statistics of the US Department of Commerce on disposable income B.) corporate annual reports C.) innovations within the automotive industry D.) daily trading volumes on the NYSE
D.) daily trading volumes on the NYSE Trading volume -> Technical analyst
The ABCD Corporation has a beta coefficient of 1.25. Your client's portfolio contains $20,000 worth of ABCD common stock. After a rise in the overall market of 10%, we would expect the value of this client's ABCD common stock to A.) increase by $5,000 B.) decrease by 25% C.) increase by $2,000 D.) increase by $2,500
D.) increase by $2,500 10% rise => 12.5% $20,000 • 0.125 = $2,500 increase
When viewing the municipal bond portfolio of one of your customers, you notice that the $250,000 of face value has 20% each in bonds rate AAA, AA, A, BBB, and BB. this in an example of A.) maturity diversification B.) duration diversification C.) geographic diversification D.) qualify diversification
D.) qualify diversification
SSS Corporation's total assets amount to $780,000 of which $260,000 represents current assets. Total liabilities equal $370,000 of which $200,000 is considered long-term or other liabilities. What is the equity of SSS Corporation's shareholders? A.) $410,000 B.) $170,000 C.) $1,150,000 D.) $980,000
A.) $410,000 ($780,000 - $370,000 = $410,00)
An investor is concerned with the risks associated with investing but wants to maximize their potential return. Because you are her registered representative, she asks you what you would recommend. You recommend investing in a diversified portfolio to accomplish her investment goals. Which of the following focuses on diversification to minimize risk while simultaneously increasing excepted return? A.) Beta B.) Modern portfolio theory C.) Alpha D.) Tactical asset allocation
B.) Modern portfolio theory
The manager of ABC Municipal Securities is interested in bidding on some general obligation bond issues that will be available in the coming months. Where would the manager find information about these forthcoming issues? A.) The Washington Post B.) The Bond Buyer C.) Standard & Poor's Bond Guide D.) Electronic Municipal Market Access (EMMA)
B.) The Bond Buyer
On Sept 1 an investor sold 100 shares of KLP Corporation common stock for a loss of $1 per share. On Sept 15 he purchased a KLP convertible bond with a conversion price of $40. How much of the original loss may he now declare for tax purposes? A.) $100 B.) $40 C.) None D.) $75
D.) $75 Because he purchased the convertible bond less than 30 days after realizing the loss, the sale of the stock falls under the wash sale rule. Investors who sell a security at a loss, and repurchase it, including its equivalent (e.g. convertible bond, warrant, or call option), 30 days before or after the sale will have the loss disallowed by the IRS. With the conversion price of $40 the bond could be converted into 25 shares (1000/40) of KLP common stock. Hence the investor has "brought back" the equivalent of 25 shares and may only declare a $75 loss
A registered representative noticed that a stock was approaching its resistance line. This is generally considered A.) ambiguous. B.) bullish. C.) neutral. D.) bearish.
D.) bearish.
A registered rep was researching ABC, a technology stock. When looking at a graph of historical prices, the rep noticed that the variance in price movement has shrunk. This is an example of A.) odd-lot trading B.) shrinking C.) narrowing D.) consolidation
D.) consolidation Difference between a stock's resistance and support level narrows, that is a condition called consolidation
A corporation has an IPO of its $5 par common stock. The public offering price (POP) is $15 per share. The difference between the par value and the POP represents A.) retained earnings. B.) paid-in surplus. C.) net income. D.) capitalized profit.
B.) paid-in surplus.
While looking at a chart for QRS Common stock, a technical trader wants to have an order in position in the vent that QRS moves higher and breaks out on the chart. A buy stop order would be placed A.) just above the support level B.) just above the resistance level C.) just below the resistance level D.) just below the support level
B.) just above the resistance level
A customer buys 100 XYZ at $30. Two years later, with the stock trading at $70, the customer gifts the securities to his son. Which of the following statements are true? I. For gift-tax purposes, the value of the gift is $3,000 II. For gift-tax purposes the value of the gift is $7,000 III. The son's cost basis on the stock is $3,000 IV. The son's cost basis on the stock is $7,000 A.) I and IV B.) II and IV C.) II and III D.) I and III
C.) II and III
ABC has the following recorded on its balance sheet: Current assets - $50,000 Fixed assets - $100,000 Notes Payable - $40,000 Accounts payable - $25,000 Based on this information ABC's net worth is A.) $85,000 B.) -$35,000 C.) $110,000 D.) $35,000
A.) $85,000 $50,000 + $100,000 - $40,000 0 $25,000
XYZ Corporation has a market price of $45 per share and earning per share of $3 when XYZ announces a 3 for 1 split. After the split the price-to-earning (P/E) ratio of XYZ will be A.) 15 B.) 45 C.) 5 D.) 3
A.) 15 Before split company has a P/E ratio of 15 ($45/3). After the split the price per share and EPS drop in the same proportion leaving the P/E ratio unchanged (new price = $15, new EPS = $1)
Acme Pharmaceuticals previously had issued $200 million of common stock in an IPO. A year later, it issued $50 million of debentures at par value. Acme's leverage is what percentage of its total capital? A.) 20% B.) 50% C.) 25% D.) 400%
A.) 20% Acme has issued $50 million of debentures and $200 million of equity capital. => total capitalization of Acme = $250 million $50 million / $250 million = 20%
You are reviewing a company's financial statements to assist a customer. What kind of information is most likely to be found in the footnotes to those financial statements? A.) Accounting methods used B.) The names of the company's most formidable competitors C.) The name, address, and contact information for the firm's chief executive officer D.) The length of time each director has served on the board of directors
A.) Accounting methods used
An investor follows a program of buying 100 shares of Mutable Precision Casting Corporation (MPCC) common stock every six months. Over the past two years the purchase prices have been: Feb 1 2020 at $50, Aug 1 2020 at $55, Feb 1 2021 at $60, and Aug 1 2021 $48. Needing some cash before the end of the year, the investor desires to sell 200 shares of MPCC stock in Nov 2021. The investor is in the 35% income tax bracket and MPCC stock is trading at $53 per share. From a tax minimization standpoint, you would recommend selling the share bought A.) August 1, 2020 and share bought of February 1 2021 B.) February 1 2021 and share bought on August 2021 C.) August 1 2020 and share bought on August 1 2021 D.) February 1 2020 and share bought on August 1 2020.
A.) August 1, 2020 and share bought of February 1 2021 Minimizing taxes => selling shares with the highest cost
Most taxes in the US fit into one of two categories. They are either progressive or regressive. Which of the following taxes are known as progressive taxes? I. Sales II. Cigarette III. Income IV. Estate A.) III and IV B.) II and IV C.) I and III D.) I and II
A.) III and IV
Which of the following statements regarding the visible supply in The Bond Buyer is true? A.) It is a daily listing of bonds to be offered in the next 30 days. B.) It is a daily listing of available bonds. C.) It is a weekly listing of bonds sold in the past 30 days. D.) It is the total of the bonds offered in the Blue List
A.) It is a daily listing of bonds to be offered in the next 30 days.
A client purchases 1,000 shares of the XYZ Value Fund when the NAV is $18.75 and the POP is $19.74. Five years later, the client makes a gift to her daughter when NAV is $24.50 and POP is $25.79. The daughter elects to receive all distributions in cash. Two years after the gift, she sells all shares when the NAV is $34.25 and POP is $36.05. What are the tax consequences of this sale? A.) Long-term capital gain of $14,510 B.) Long-term capital gain of $16,310 C.) Long-term capital gain of $17,300 D.) Long-term capital gain of $15,500
A.) Long-term capital gain of $14,510
All of the following might be used to measure the marketability of a new municipal general obligation issue except A.) Revdex B.) Visible supply C.) S&P's ratings D.) Placement ratio
A.) Revdex
Which of the following is an automated system of delivering information relating to the market for municipal securities? A.) Thomson's Muni News or Muni Market Monitor (Munifacts) B.) INSTINET C.) The Bond Buyer D.) The Blue List
A.) Thomson's Muni News or Muni Market Monitor (Munifacts)
The Bond Buyer's 20-Bond Index reflects A.) the average yield of 20 high-quality general obligation bonds. B.) the average yield of 20 high-quality revenue bonds. C.) the average yield of 20 high-quality municipal bonds. D.) the average maturity of 20 high-quality municipal bonds.
A.) the average yield of 20 high-quality general obligation bonds.
Which of the following is an automated system of delivering information relating to the market for municipal securities? A.) The Bond Buyer B.) Thomson's Muni News or Muni Market Monitor C.) INSTINET D.) The Blue List
B.) Thomson's Muni News or Muni Market Monitor
An investor is following the new issue municipal bond market. The primary source material is found in the Daily Bond Buyer. This publication is distributed on A.) a weekly basis B.) a daily basis C.) an as need basis D.) an hourly basis
B.) a daily basis
If you heard a portfolio manager bragging about the portfolio generate excess returns, it means that there was A.) a positive beta B.) a postive alpha C.) a return in excess of the risk-free rate D.) a dividend payout greater than excepted
B.) a postive alpha
The effect of using the first in, first out (FIFO) method for a sale of some of the securities that were purchased during a period of rising prices will be A.) a decrease in the tax-liabilities of the investor B.) an increase in the taxable profits of the investor C.) a decrease in the profits of the investor D.) an increase in the cost basis of the securities
B.) an increase in the taxable profits of the investor
Included in the working capital computation of a corporation are all of the following except A.) cash on hand B.) convertible bonds outstanding C.) investment in marketable securities D.) accounts payable
B.) convertible bonds outstanding Working capital of a corporation is equal to its current assets minus current liabilities. Because all bonds (convertible or not) issued by the corporation are long term liabilities they are not included in the working capital computation
XYZ Corporation owns 18% of the voting common stock of ABCD Enterprises. In the current tax year, XYZ receives $250,000 in dividend income from its investment in ABCD. If XYZ has a marginal tax rate of 21% what is its tax liability on the dividend income received? A.) $9,450 B.) $0 C.) $26,250 D.) $52,500
C.) $26,250 Only 50% of the $250,00 is subject to tax (e.g. $125,000) $125,000 • .21 = $26,250
When comparing portfolio managers, a registered representative would most likely recommend the one whose alpha for the past year was A.) +0.78% B.) 0%. C.) +2.7%. D.) ‒3.6%.
C.) +2.7%
A technical analyst would find which of the following to be a bullish indicator? A.) More odd-lot purchases than sales B.) A breakout through the support level C.) A head and shoulders bottom D.) A decrease in the short interest
C.) A head and shoulders bottom Bullish because it indicates the market has bottomed (so only direction is up)
Your customer redeemed 200 of her 500 Kapco common shares without designating which shares were redeemed. Which of the following methods does the IRS use to determine which shares she redeemed? A.) Wash sale rules B.) Last in, first out (LIFO) C.) First in, first out (FIFO) D.) Identified shares
C.) First in, first out (FIFO)
When comparing the performance of several portfolios which would you be most likely to recommend to your clients> A.) The one with the highest beta B.) The one with the lowest alpha C.) The one with the highest alpha D.) The one with the lowest beta
C.) The one with the highest alpha
You are analyzing a company's financial statements, including the balance sheet. You are specifically focusing on the company's liquidity, using the formula current assets minus current liabilities. What liquidity calculation are you using? A.) Acid-test ratio B.) Current ratio C.) Working capital D.) Quick asset ratio
C.) Working capital
The Bond Buyer's revenue index is which of the following? A.) A daily balance of municipal revenue bond prices B.) Yields of municipal revenue bonds with 20 years to maturity C.) Yields of municipal revenue bonds with 30 years to maturity D.) A daily composite average of municipal revenue bond yields
C.) Yields of municipal revenue bonds with 30 years to maturity
A registered representative of a member broker-dealer receives a customer order to sell 100 shares of ABC and use the proceeds to purchase 200 shares of MNO. The trades are made on the NYSE and the execution price is $15 per share for the ABC and $7.50 per share for the MNO. In order to avoid a violation of FINRA's 5% markup policy, the member firm should A.) Consider this to be one single transaction rather than two separate ones when determining the markup to be charged B.) Consider this to be one single transaction rather than two separate ones when determining the markup and markdown to be charged C.) Give advance notice to the customer that the commissions might be slightly higher than normal due to the extra work involved in the two transactions D.) Consider this to be one single transaction rather than two separate ones when determining the commission to be charged
D.) Consider this to be one single transaction rather than two separate ones when determining the commission to be charged * this is an example of a proceeds transactions
One of your customer's noticed that the short interest on the NYSE is high. When she asked you for an interpretation, you should tell her that this signals A.) a period of volatility in the market B.) a bearish market C.) a period of stability in the market D.) a bullish market
D.) a bullish market
