If a trader developed a series of algorithms and bots to help her profit from predictable price trends, then which of the following algorithms would have resulted in the highest profit? (Note: Assume there were no transaction costs associated with the transactions and that purchase and sell orders occur immediately.) If the price of Humphry Incorporated's stock decreases by exactly $1 in 15 minutes, take the short position on 1,500 shares. Then, if the stock price decreases below $2, offset the short position. If the price of Humphry Incorporated's stock decreases by exactly $2 in 15 minutes, submit an order to purchase 3,000 shares. Then, if the stock price increases at all in any given 15-minute interval, submit an order to sell 3,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 1,000 shares. Then, if the stock price increases above $8, submit an order to sell 1,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit the stock price increases above $7.25, submit an order to sell 6,000 shares. order to purchase 6,000 shares. Then, if
If a trader developed a series of algorithms and bots to help her profit from predictable price trends, then which of the following algorithms would have resulted in the highest profit? (Note: Assume there were no transaction costs associated with the transactions and that purchase and sell orders occur immediately.) If the price of Humphry Incorporated's stock decreases by exactly $1 in 15 minutes, take the short position on 1,500 shares. Then, if the stock price decreases below $2, offset the short position. If the price of Humphry Incorporated's stock decreases by exactly $2 in 15 minutes, submit an order to purchase 3,000 shares. Then, if the stock price increases at all in any given 15-minute interval, submit an order to sell 3,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 1,000 shares. Then, if the stock price increases above $8, submit an order to sell 1,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit the stock price increases above $7.25, submit an order to sell 6,000 shares. order to purchase 6,000 shares. Then, if
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![If a trader developed a series of algorithms and bots to help her profit from predictable price trends, then which of the following algorithms would
have resulted in the highest profit? (Note: Assume there were no transaction costs associated with the transactions and that purchase and sell orders
occur immediately.)
If the price of Humphry Incorporated's stock decreases by exactly $1 in 15 minutes, take the short position on 1,500 shares. Then, if the
stock price decreases below $2, offset the short position.
If the price of Humphry Incorporated's stock decreases by exactly $2 in 15 minutes, submit an order to purchase 3,000 shares. Then, if
the stock price increases at all in any given 15-minute interval, submit an order to sell 3,000 shares.
If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 1,000 shares. Then, if
the stock price increases above $8, submit an order to sell 1,000 shares.
If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 6,000 shares. Then, if
the stock price increases above $7.25, submit an order to sell 6,000 shares.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F67f0da2a-638e-499d-a686-16efc43f695b%2Fc32e2863-dbe9-4098-b5e4-5724be4081e2%2F8zheiq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:If a trader developed a series of algorithms and bots to help her profit from predictable price trends, then which of the following algorithms would
have resulted in the highest profit? (Note: Assume there were no transaction costs associated with the transactions and that purchase and sell orders
occur immediately.)
If the price of Humphry Incorporated's stock decreases by exactly $1 in 15 minutes, take the short position on 1,500 shares. Then, if the
stock price decreases below $2, offset the short position.
If the price of Humphry Incorporated's stock decreases by exactly $2 in 15 minutes, submit an order to purchase 3,000 shares. Then, if
the stock price increases at all in any given 15-minute interval, submit an order to sell 3,000 shares.
If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 1,000 shares. Then, if
the stock price increases above $8, submit an order to sell 1,000 shares.
If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 6,000 shares. Then, if
the stock price increases above $7.25, submit an order to sell 6,000 shares.
![Consider the following graph, which shows Humphry Incorporated's extremely volatile stock trend from 1 PM to 4 PM on a Tuesday. Each point on the
graph represents a 15-minute time interval and the price the stock was tracked to be at that interval.
10
3
2
1
Humphry Incorporated's Daily Stock Trend
гл
w
2
TIME (Hour in the day)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F67f0da2a-638e-499d-a686-16efc43f695b%2Fc32e2863-dbe9-4098-b5e4-5724be4081e2%2Fej3avkq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider the following graph, which shows Humphry Incorporated's extremely volatile stock trend from 1 PM to 4 PM on a Tuesday. Each point on the
graph represents a 15-minute time interval and the price the stock was tracked to be at that interval.
10
3
2
1
Humphry Incorporated's Daily Stock Trend
гл
w
2
TIME (Hour in the day)
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