Comprehension

The chart below shows the price data for seven shares – A, B, C, D, E, F, and G as a candlestick plot for a particular day. The vertical axis shows the price of the share in rupees. A share whose closing price (price at the end of the day) is more than its opening price (price at the start of the day) is called a bullish share; otherwise, it is called a bearish share. All bullish and bearish shares are shown in green and red colour respectively.
Problem Figure

Question: 1

Daily Share Price Variability (SPV) is defined as (Day’s high price - Day’s low price) /(Average of the opening and closing prices during the day). Which among the shares A, C, D and F had the highest SPV on that day?

Updated On: Nov 29, 2024
  • F
  • C
  • D
  • A
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The Correct Option is C

Solution and Explanation

The SPV is calculated by dividing the difference between the day’s high and low prices by the average of the opening and closing prices. Based on this formula, the share with the largest difference between its high and low prices relative to its average opening and closing price will have the highest SPV. After calculating for each share, share D has the highest SPV.

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Question: 2

Daily Share Price Variability (SPV) is defined as (Day’s high price - Day’s low price) /(Average of the opening and closing prices during the day). How many shares had an SPV greater than 0.5 on that day?

Updated On: Nov 29, 2024
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Correct Answer: 4

Solution and Explanation

For each of the shares, calculate the SPV using the given formula. Count how many shares have an SPV greater than 0.5. After calculation, we find that 4 shares had an SPV greater than 0.5 on that day.

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Question: 3

Daily loss for a share is defined as (Opening price – Closing price) / (Opening price). Which among the shares A, B, F and G had the highest daily loss on that day?

Updated On: Nov 29, 2024
  • G
  • B
  • A
  • F
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The Correct Option is C

Solution and Explanation

The daily loss is calculated using the formula (Opening price−Closing price)/Opening price. This will give the loss as a percentage. After calculating for shares A, B, F, and G, we find that share A had the highest daily loss.

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Question: 4

What would have been the percentage wealth gain for a trader, who bought equal numbers of all bullish shares at opening price and sold them at their day’s high?

Updated On: Nov 29, 2024
  • 80%
  • 50%
  • 72%
  • 100%
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The Correct Option is A

Solution and Explanation

To calculate the percentage wealth gain, first determine the total investment by buying equal numbers of all bullish shares at their opening prices. Then calculate the wealth gain by selling them at the day’s high prices. If the trader bought shares that were bullish (closing price, opening price), the gain can be calculated by taking the difference between the opening and closing prices for each bullish share, averaging them, and calculating the percentage increase. After calculations, the total percentage wealth gain is 80.

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