Question Details

Directions (Q.25-Q.28): 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.


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?

Options

A

50%

B

80%

C

72%

D

100%

Show Answer

Correct Answer :

Option B

80%

Solution :

The correct option is 80%.

To find the percentage wealth gain for the trader, we analyze the price data of the bullish shares from the given candlestick chart. According to the legend:
1. A bullish share is shown in green.
2. For a bullish share, the bottom of the solid green box represents the opening price, and the top of the vertical line (wick) represents the day's high price.

From the chart, the green (bullish) shares are C, D, and G. Let us determine their opening prices and day's high prices:

Share C:
- Opening Price (bottom of the green box) = 800 rupees
- Day's High Price (top of the upper wick) = 1400 rupees

Share D:
- Opening Price (bottom of the green box) = 500 rupees (midway between 400 and 600)
- Day's High Price (top of the upper wick) = 1200 rupees

Share G:
- Opening Price (bottom of the green box) = 1200 rupees
- Day's High Price (top of the upper wick) = 1900 rupees (midway between 1800 and 2000)

Now, let us calculate the total cost price for buying equal numbers (1 share each) of all bullish shares at their opening prices:

Total Cost Price = 800 + 500 + 1200 = 2500  rupees

Next, we calculate the total selling price by selling these shares at their day's high prices:

Total Selling Price = 1400 + 1200 + 1900 = 4500  rupees

The wealth gain (profit) made by the trader is:

Wealth Gain = Total Selling Price Total Cost Price

Substituting the values:

Wealth Gain = 4500 2500 = 2000  rupees

The percentage wealth gain is calculated as:

Percentage Wealth Gain = Wealth Gain Total Cost Price × 100

Substituting the calculated values into this formula:

Percentage Wealth Gain = 2000 2500 × 100 = 80 %

Thus, the trader's percentage wealth gain is 80%.

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