We invite you to particiapte in our CMT Exam Prep pop quiz where we showcase a sample question from the program. Challenge yourself with the question below!

Bollinger Bands:

A) Are plotted as standard deviations of opening prices with a default value of 2 standard deviations
B) Is another term for bands based on standard deviations of price
C) Are inversely proportional to volatility
D) Narrow when there’s a breakout

Correct Answer: B.

A is incorrect, Bollinger Bands are based on closing prices.

B is correct, as this is the case.

C is incorrect. The Bands will expand with volatility and are directly related to volatility.

D is incorrect, as bands can widen or narrow on a breakout.