Two traders, T1 and T2, were involved in the buying and selling of MCS shares over five trading days. At the beginning of the first day, the MCS share was priced at Rs. 100, while at the end of the fifth day it was priced at Rs. 110. At the end of each day, the MCS share price either went up by Rs. 10, or else, it came down by Rs. 10. Both T1 and T2 took buying and selling decisions at the end of each trading day.

 

The beginning price of MCS share on a given day was the same as the ending price of the previous day.

T1 and T2 started with the same number of shares and amount of cash, and had enough of both. Below are some additional facts about how T1 and T2 traded over the five trading days.

Each day if the price went up, T1 sold 10shares of MCS at the closing price. On the other hand, each day if the price went down, he bought10 shares at the closing price.

If on any day, the closing price was above Rs.110, then T2 sold 10 shares of MCS, while if it was below Rs. 90, he bought 10 shares, all at the closing price.

What could have been the maximum possible increase in combined cash balance of T1 and T2 at the end of the fifth day?

Option 1 -

Rs. 3700

Option 2 -

Rs. 4000

Option 3 -

Rs. 4700    

Option 4 -

RS. 5000

0 1 View | Posted 2 months ago
Asked by Shiksha User

  • 1 Answer

  • P

    Answered by

    Payal Gupta | Contributor-Level 10

    2 months ago
    Correct Option - 4


    Detailed Solution:

     

    Day 1

    Day 2

    Day  3

    Day 4

    Day 5

    Start Price

    100

    110

    120

    130

    120

    End  Price

    110

    120

    130

    120

    110

     

    Let initial amount with T1 and Michal is .

    T1 sold shares on Day 1, Day 2, Day 3, whereas buys shares on Day 4 and Day 5.

    Total money with T1 is = Y + 110 * 10 + 120 * 10 + 130 * 10 – 120 * 10 – 110 * 10 = Y + 1300

    Total money with T2 = Y + 1200

    Total money with T2 = Y + 120 * 10 + 130 * 10 + 120 * 10 = Y + 3700

    Total money with T2 & T1 = 2Y + 5000.

    Therefore maximum possible increase is 5000.

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