CFA Practice Question

There are 221 practice questions for this study session.

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.
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