CAT 2008 | Question: 30

Question

Answer the following question based on the information given below.

Abdul and Bikram and Chetan are three professional traders who trade in shares of a company $\text{XYZ}$ 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 investment amount expressed as a percentage.

On a “boom” day the share price of $\text{XYZ}$ Ltd, keeps raising throughout the day and peaks at the close of the day. Which trader got the minimum profit on that day?

• A. Bikram
• B. Chetan
• C. Abdul
• D. Abdul and Chetan
• E. cannot be determined

Answer 1

Answer C) Abdul

On "boom"'s day share prices keeps raising throughout the day and peaks at the close of the day

Abdul keep opened the company upto 3 pm

while other close the company at 2 pm

Comments

Everyone sells at 3 pm.