Podcast
Questions and Answers
What is done to past prices of a stock when a stock splits?
What is done to past prices of a stock when a stock splits?
- They are divided by the stock's current price.
- They are left unchanged.
- They are adjusted proportionately based on the split ratio. (correct)
- They are multiplied by the split ratio.
How would the price chart appear if no adjustment was made after a 2:1 stock split?
How would the price chart appear if no adjustment was made after a 2:1 stock split?
- It would show no change in price.
- It would show a price drop from $50 to $25. (correct)
- It would not display any past prices.
- It would show a price increase from $25 to $50.
How does adjusting stock prices for stock splits help in maintaining accurate price moves in the series?
How does adjusting stock prices for stock splits help in maintaining accurate price moves in the series?
- It causes a distortion and exaggerates price moves.
- It eliminates all past prices from the chart.
- It prevents distortion and reflects true price moves. (correct)
- It leads to absurdity in price movements.
In the scenario of three 2:1 stock splits, what is done to prices before the splits occur?
In the scenario of three 2:1 stock splits, what is done to prices before the splits occur?
What problem may arise if adjustments for stock splits are not taken into account in analyzing past price changes?
What problem may arise if adjustments for stock splits are not taken into account in analyzing past price changes?
Why is it important to adjust stock price series for stock splits despite potential underestimation of price changes?
Why is it important to adjust stock price series for stock splits despite potential underestimation of price changes?
In trading systems testing, what is a suggested method to mitigate distortions caused by price rises due to splits?
In trading systems testing, what is a suggested method to mitigate distortions caused by price rises due to splits?
What would a price rise from $5 to $8 represent prior to three splits, based on the text?
What would a price rise from $5 to $8 represent prior to three splits, based on the text?
How can assuming a fixed-dollar position in trading systems help with split-adjusted price distortions?
How can assuming a fixed-dollar position in trading systems help with split-adjusted price distortions?
What is the suggested trade size when the split-adjusted price is $50?
What is the suggested trade size when the split-adjusted price is $50?
Why is it mentioned that standard split-adjusted price data can significantly distort trading system results?
Why is it mentioned that standard split-adjusted price data can significantly distort trading system results?
How do stock charts differ from futures contracts in terms of data series representation?
How do stock charts differ from futures contracts in terms of data series representation?
What is a common gap?
What is a common gap?
What is a breakaway gap?
What is a breakaway gap?
What is a runaway gap known for?
What is a runaway gap known for?
What distinguishes an exhaustion gap from a runaway gap?
What distinguishes an exhaustion gap from a runaway gap?
What is the significance of a breakaway gap that is not filled within a few days?
What is the significance of a breakaway gap that is not filled within a few days?
In what type of market can a series of runaway gaps occur on consecutive days?
In what type of market can a series of runaway gaps occur on consecutive days?
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