QUESTION 2: (50 Marks) Read the following first and then answer the questions The stock market just stepped into the 'danger' zone Jeff Cox, 17 Aug 2016 ETCNBC.com "Professional investors are getting really confident that the stock market will keep moving higher maybe a ittle too confident A popular gauge of investor sentiment, in fact, is flashing a signal that the latest runup in equity prices to fresh record highs is getting overheated. The Investors Intelligence survey, which measures the attitudes of more than 100 investor newsletter authors, is showing bullishness at 56.2 percent of respondents, which is indicative of an unusually high level of optimism That reading "is considered the daner lve," said John Gray, co-editor of the Investors Intelligence newsletter, which interprets high levels of sentiment in either direction as indicators that the market is poised to head the other way in the near term Gray notes that when the bullish level exceeds 55 percent, it has been consistent with a market pullback. It happened in February 2015 and then in April of the same year, when the market was on a ride that eventually would take the S&P 500 down about 15 percent in 12 months' time Gray said judging by current conditions, the bulls could have room to run Early July saw the bulls exceed 50 percent and we said it might take the Nasdaq comp joining other ongoing index highs to achieve the capitulation to boost the reading to into levels." the top region," he said. "The bulls could still advance further to equal those 2015 pealk The bear level is all the way down to 20 percent, which is near a multiyear low. That bull-bear spread of 36.2 percentage points is nearly 3 percentage points higher just in the past week and is the widest since early 2015, just before the market slide. Gray said a spread of more than 30 percentage points is indicative of "higher risk" ahead, while a 40 percentage point difference points to "danger. QUESTION 2: (50 Marks) Read the following first and then answer the questions The stock market just stepped into the 'danger' zone Jeff Cox, 17 Aug 2016 ETCNBC.com "Professional investors are getting really confident that the stock market will keep moving higher maybe a ittle too confident A popular gauge of investor sentiment, in fact, is flashing a signal that the latest runup in equity prices to fresh record highs is getting overheated. The Investors Intelligence survey, which measures the attitudes of more than 100 investor newsletter authors, is showing bullishness at 56.2 percent of respondents, which is indicative of an unusually high level of optimism That reading "is considered the daner lve," said John Gray, co-editor of the Investors Intelligence newsletter, which interprets high levels of sentiment in either direction as indicators that the market is poised to head the other way in the near term Gray notes that when the bullish level exceeds 55 percent, it has been consistent with a market pullback. It happened in February 2015 and then in April of the same year, when the market was on a ride that eventually would take the S&P 500 down about 15 percent in 12 months' time Gray said judging by current conditions, the bulls could have room to run Early July saw the bulls exceed 50 percent and we said it might take the Nasdaq comp joining other ongoing index highs to achieve the capitulation to boost the reading to into levels." the top region," he said. "The bulls could still advance further to equal those 2015 pealk The bear level is all the way down to 20 percent, which is near a multiyear low. That bull-bear spread of 36.2 percentage points is nearly 3 percentage points higher just in the past week and is the widest since early 2015, just before the market slide. Gray said a spread of more than 30 percentage points is indicative of "higher risk" ahead, while a 40 percentage point difference points to "danger