When the 50-Day Moving Average Crosses the 200-Day Moving Average

question 117

Multiple Choice

When the 50-day moving average crosses the 200-day moving average from below on good volume,

• A) this would be a bearish indicator because it signals a change to a negative trend.
• B) this would be a bullish indicator because it signals a change to a negative trend.
• C) this would be a bullish indicator because it signals a change to a positive trend.
• D) this would be a bearish indicator because it signals a change to a positive trend.
• E) this would be a neutral indicator because it signals a change to a trend.

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Definitions:

Guaranteed Salvage Value

The minimum value for which an asset can be sold at the end of its useful life, as guaranteed by a contract or agreement.

Depreciation Expense

The allocated portion of the cost of a fixed asset over its useful life, recognized as an expense on the income statement.

Sales-Type Lease

A financing arrangement in leasing, where the lessor recognizes immediate sales revenue and profit on the leased asset.

Direct Financing Lease

A leasing arrangement where the lessor purchases an asset and leases it out, recognizing interest income over the lease term.