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Question:

On a day of fluctuating market prices, the share price of XYZ Ltd. ends with a gain, i.e., it is higher at the close of the day compared to the opening value. Which trader got the maximum return on that day?

Explanation:

Since Chetan’s return is always higher than or equal to that of Bikram, the trader with the maximum return would be either Abdul or Chetan.

If it is a continuously rising market then Abdul would end up having the highest gain as seen in the example above.

But there might be a scenario when the share price of XYZ would go down after 10 AM and rise in the end at 3 PM to a higher value.

In such a case, if Chetan gets the shares at lower prices than what the price was at 10 AM he would end up making more profit and hence higher return.

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Here, Abdul’s returns remain unaltered as 100%.

Let Chetan always buy shares worth Rs. 100.

So he would end up buying 1 + 10 + 10 + 10 + 10 = 41 shares.

When he sells the same at Rs. 200 he gets Rs. 8,200 for the same.

∴ Chetan’s profit = 8200 − 500 = 7700

∴ Chetan's returns = $\frac{7700}{500}>100\%$

∴ We cannot say for sure who would have higher returns. 

Hence, option (e).