Comprehension
Read the passages below to answer the questions that follow each passage.
Having investigated the nature of the relationship between price and trading volume for 50 Indian stocks, our findings indicate evidence of positive contemporaneous correlation between price changes and trading volume in Indian stock markets. All the stocks, except Reliance Power, show asymmetric behaviour, which is in line with the research findings. Investigation of dynamic relationship between returns and trading volume shows very interesting results. We find evidence that in the Indian market, past returns cause trading volume, which can be easily conceived in an emerging market where the state of development of the in market possibly does not allow instantaneous information dissemination. These results are further supported by the variance decomposition. However, in most cases the relationship lacks economic significance even though it is statistically significant. The results of impulse response analysis indicate that both returns and volume are mostly affected by their own lag and that volume is more auto regressive than returns, that is any shock in either returns or volume does not affect the return series beyond one lag. In case of unconditional volatility and trading volume, we find a positive contemporaneous relationship between trading volume and unconditional volatility.
Having investigated the nature of the relationship between price and trading volume for 50 Indian stocks, our findings indicate evidence of positive contemporaneous correlation between price changes and trading volume in Indian stock markets. All the stocks, except Reliance Power, show asymmetric behaviour, which is in line with the research findings. Investigation of dynamic relationship between returns and trading volume shows very interesting results. We find evidence that in the Indian market, past returns cause trading volume, which can be easily conceived in an emerging market where the state of development of the in market possibly does not allow instantaneous information dissemination. These results are further supported by the variance decomposition. However, in most cases the relationship lacks economic significance even though it is statistically significant. The results of impulse response analysis indicate that both returns and volume are mostly affected by their own lag and that volume is more auto regressive than returns, that is any shock in either returns or volume does not affect the return series beyond one lag. In case of unconditional volatility and trading volume, we find a positive contemporaneous relationship between trading volume and unconditional volatility.
Question: 1
According to the passage, the research finding show
A. positive contemporaneous relationship between trading volume and volatility.
B. Reliance Power confirms the general trend.
C information is not disseminated instantaneously in the stock market.
According to the passage, the research finding show
A. positive contemporaneous relationship between trading volume and volatility.
B. Reliance Power confirms the general trend.
C information is not disseminated instantaneously in the stock market.
A. positive contemporaneous relationship between trading volume and volatility.
B. Reliance Power confirms the general trend.
C information is not disseminated instantaneously in the stock market.
Updated On: Oct 10, 2024
- A, B, and C
- A and B
- A and C
- B and C
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The Correct Option is B
Solution and Explanation
Statement A is explicitly written in the last sentence of the passage. Statement C can be found in the middle of the passage in the sentence "We find evidence....... does not allow instantaneous information dissemination". Regarding Reliance Power, it doesn't show the general trend, as can be seen in the second sentence of the passage.
The correct option is (B)
The correct option is (B)
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Question: 2
It can be inferred from the passage that
It can be inferred from the passage that
Updated On: Oct 10, 2024
- the trading volume does not depend on the past returns.
- the trading volume largely depends on the past returns.
- the trading volume has no positive correlation with volatility
- the trading volume depends on the variance decomposition.
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The Correct Option is B
Solution and Explanation
Option (b) which says trading volume largely depends uopn past returns, can be seen in the sentence "We find evidence that in the Indian market, past returns cause trading volume, which......"
The correct option is (B)
The correct option is (B)
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Question: 3
According to the passage, subjects that are discussed does not include
According to the passage, subjects that are discussed does not include
Updated On: Oct 10, 2024
- trends in returns vis-a-vis volatility.
- stock market losses during recession.
- information dissemination being slow within the market.
- results of the research have more of statistical significance than economic.
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The Correct Option is B
Solution and Explanation
The passage does not discuss anything about stock market losses during recession.
The correct option is (B)
The correct option is (B)
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Question: 4
According to the passage, which one of the following inferences is false?
According to the passage, which one of the following inferences is false?
Updated On: Oct 10, 2024
- Any shock in either returns or volume affects the return series beyond one lag.
- In case of unconditional volatility and trading volume;, there exists a positive contemporaneous relationship between trading volume and unconditional volatility
- Both returns and volume are mostly affected by their own lag
- The state of development of the market possibly does not allow instantaneous information dissemination.
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The Correct Option is A
Solution and Explanation
Option (a) is not inferred in the passage. In fact, the statement in Option (a) is exactly opposite to the sentence "The results of impulse.... any shock in either returns or volume does not affect the return series beyond one lag", which is the second last sentence of the passage.
The correct option is (A)
The correct option is (A)
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Top Questions on Reading Comprehension
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THE FAIR ISLE METHOD: Fair Isle knitting is a traditional technique that involves using two or more colours of yarn in a single row to create intricate patterns and designs. This method requires careful tension management to ensure even stitches and prevent puckering. To begin, select your colours and cast on the desired number of stitches. As you knit, alternate between colours every few stitches, carrying the unused yarn along the back of the work. Mastering the Fair Isle technique allows you to create stunning visual effects in garments, accessories, and home textiles.
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