CAT 2024Slot 1DILRQuestion & SolutionQues & Sol
Data Set
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.
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?
Solution
Writing down the values given in the candlestick chart in the form of a table for ease of calculation,
We are given that, 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)
Calculating it for the four options,
Stock F: 800/1700=8/17
Stock A: 1200/2000=3/5
Stock D: 900/750=90/75=6/5
Stock C: 600/1000=3/5
Clearly Stock D has the highest SPV.
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?
Solution
Writing down the values given in the candlestick chart in the form of a table for ease of calculation,
We are given that, 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)
Calculating it for the stocks
Stock A: 1200/2000=3/5
Stock B: 600/1850=60/185
Stock C: 600/1000=3/5
Stock D: 900/750=90/75=6/5
Stock E: 300/1200=1/4
Stock F: 800/1700=8/17
Stock G: 900/1450=90/145
We need to check for stocks greater than 0.5 on that day,
Stock A, Stock C, Stock D, Stock G have SPV greater than 0.5 that day.
Hence, the answer is 4.
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?
Solution
Writing down the values given in the candlestick chart in the form of a table for ease of calculation,
Daily loss for a share is defined as (Opening price - Closing price) / (Opening price)
Calculating this for the options:
Stock A: 400/2200=2/11
Stock B: 300/2000=3/20
Stock F: 200/1800=1/9
Stock G gained money that day
Hence Stock A has the highest Daily Loss.
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?
Solution
Writing down the values given in the candlestick chart in the form of a table for ease of calculation,
There are three bullish shares, C D and G
Lets say a trader buys one share of each of these stocks, and sells them at their day's high
One share of C at opening is 800, sells at 1400
One share of D at opening is 500, 1200
One share of G at opening is 1200, 1900
Total Investment is 2500, and total money after selling is 4500
That is an 80% return since, $\dfrac{\left(4500-2500\right)}{2500}=0.8$