CAT 2008 — DILR Question 15
Answer the following question based on the information given below.
Abdul, Bikram and Chetan are three professional traders who trade in shares of a company XYZ Ltd. Abdul follows the strategy of buying at the opening of the day at 10 am and selling the whole lot at the close of the day at 3 pm. Bikram follows the strategy of buying at hourly intervals: 10 am , 11 am, 12 noon, 1 pm and 2 pm, and selling the whole lot at the close of the day. Further, he buys an equal number of shares in each purchase. Chetan follows a similar pattern as Bikram but his strategy is somewhat different. Chetan’s total investment amount is divided equally among his purchases. The profit or loss made by each investor is the difference between the sale value at the close of the day less the investment in purchase. The “return” for each investor is defined as the ratio of the profit or loss to the investment amount expressed as a percentage.
Share price was at its highest at
Note: Use data from the previous question.
Answer & solution
10 am
- B
11 am
- C
12 noon
- D
1 pm
- E
Cannot be determined
From the solution of the last question, we can see that,
x1 > x6 > x5 > x2, x4 < x6 and x1 > x3 > x4
∴ x1, i.e. the share price at 10 is the highest.
Hence, option (a).