- CFA Exams
- CFA Level I Exam
- Study Session 19. Portfolio Management (2)
- Reading 56. Technical Analysis
- Subject 5. Technical Indicators
CFA Practice Question
Margin loans may increase the purchase of stocks. Declining margin debt may force the selling of stocks. This is using margin debt as a ______.
A. sentiment indicator
B. momentum indicator
C. flow-of-funds indicator
Explanation: Margin debt can also be used as a sentiment indicator.
User Contributed Comments 6
| User | Comment |
|---|---|
| Procbaby1 | So the answer is it can also be A? |
| Shaan23 | I guess so but C is more specific |
| Shaan23 | My bad. Flow of Fund indicators is NOT related to sentiment indicators. I thought it was too by reading this notes. Seperate |
| alexchav | Tech sucks. |
| jeffsmith5 | the CFAI readings say it can be both sentiment indicator and flow of funds indicator |
| GBolt93 | It can be both, but in this scenario where it's specifically referencing declining margin it's flow of funds. I believe if it was low margin debt or high margin debt that would be a reference to sentiment. |