The graph illustrates changes in the price of the stock Technosoft ove

Question

Experts Global

https://www.expertsglobal.com/gmat-sample-tests-focus/itf_public/event/ITF1463499307.png

The graph illustrates changes in the price of the stock  Technosoft  over a period of time. The red and green lines are called Bollinger Bands, and they include the price range in which stock trades are most likely to occur based on a moving average. The blue line shows the moving average. The box plots show the common and extreme prices for sales of that stock on each trading day.

From the dropdown menus, select the options that create the most accurate statements based on the information provided.

The period of  GRAPH_1_PLACEHOLDER  had the greatest price volatility.

If a person bought the stock at the lowest point in the duration under study and sold it at the highest in the same, the person earned a profit of approximately  GRAPH_2_PLACEHOLDER  percentage on his investment, excluding the brokerage.

sagniksaha60 · Answer

I. During the period of Mar 01-Mar 15, the Bollinger Bands have the largest deviation from the average for the longest period of time, indicating that price during this time were varying quite a lot, making them quite volatile.
 Hence, Mar 01-Mar 15 is the correct answer choice.

II. Over the period, the lowest price was approximately $11 and the highest price was approximately $14. Hence, the maximum possible profit on investment is ($14-$11) / $11 =27% approximately.
 Hence, 27% is the correct answer choice.

imslogic · Answer

For the second question, I used the following numbers:

Sale price=$13.75
Purchase price=$10.25
Profit=($3.50/10.25)×100=34%

Where did I go wrong in my reading of the chart? Thanks!

Posted from my mobile device

soma7 · Answer

I used the value as 13.5 and 11 because, box indicates the extreme and lowest price and 13.5 is the highest price and i got 23%

Nipunh · Answer

Hi Experts! bb Bunuel KarishmaB Bismuth83 chetan2u

Bollinger Bands include the price range in which stock trades are most likely to occur based on a moving average. The blue line shows the moving average. The box plots show the common and extreme prices for sales of that stock on each trading day.

My question here is why have we taken Bollinger bands to represent the range (which is not exactly the range, but an estimate of it based on moving avearges) and not box plots that gives us the exact values? My answers are varying because of the same. Please help

Thanks and regards,
Nipunh

Thanks and regards, Nipunh

KarishmaB · Answer

We have been given that Bollinger bands are the range in which trades are most likely to occur, not the range in which they actually occur. Bolinger bands are tech analysis tools that help us invest - they indicate the price the stock will take based on volatility. They are not created after the stock moves up or down.

Also, the answer to question 2 is ambiguous. We need to approximate the lowest and the highest values in the box chart but the options are too close. There should have been only 1 option in the 20 to 30 range imo.

miag · Answer

hi, how did you get 11 as the lowest point?

siddharth_ · Answer

I got confused about the same.

So, the y axis here is not shown completely. Looking carefully, each marking on the y axis is on the horizontal gridline. Notice the gap between 12 and 14. 10 would lie much below and the graph has been cut (lowest point) at around 11.

NITISHMISHRA · Answer

Hi Experts !  bb   Bunuel   KarishmaB   Bismuth83   chetan2u

Please let me if there is any conceptual gap in my understanding, as i can see the maximum variation in  Bollinger bands  in  Feb 16- Feb 28  range. Also.....Is it incorrect to assume the height of every row in the graph to be 2, as we can see incremental change of 12 and 14 in the y-axis.

Bunuel · Answer

I would not worry about this question. The graph is not good.

The topic is archived.

The graph illustrates changes in the price of the stock Technosoft ove

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards