ML4T Final Exam Questions With All Correct Answers.

Why did it become a good investment to bet against mortgage-backed securities. A) The default rate on the mortgages kept rising. B) Rating agencies were accurately assigning ratings. C) Banks were incentivized to issue more and more mortgages. D) A and C - Answer D) A and C In terms of the fundamental law, when aiming for high performance, you can make up for low skill with ___. A) low breadth B) low sharpe ratio C) high breadth D) high volatility - Answer C) high breadth Is Bollinger Bands a leading indicator? A) Yes B) No, Bollinger Bands is a lagging indicator C) No, Bollinger Bands is not an indicator D) No, Bollinger bands is neither a leading or a lagging indicator - Answer B) No, Bollinger Bands is a lagging indicator What should you do when the stock hits the bottom Bollinger Band? A) Hold your position (don't change your position at all)