Skip to content

CMA Final · Strategic Financial Management · Fundamental Analysis and Technical Analysis

A technical analyst tracks On-Balance Volume (OBV) for a stock, starting at zero. Day 1: price closes higher, volume 10,000 shares. Day 2: closes lower, volume 4,000. Day 3: closes unchanged, volume 5,000. Day 4: closes higher, volume 8,000. What is the OBV at the end of Day 4?

OBV is 14,000. Volume is added on days when the price closes higher, subtracted when it closes lower, and ignored when the close is unchanged. So 10,000 minus 4,000, no change on Day 3, plus 8,000 gives 14,000.

  1. A14,000Correct
  2. B6,000
  3. C22,000
  4. D10,000

Explanation

OBV adds volume on up-close days, subtracts it on down-close days and ignores unchanged days. Working: 0 + 10,000 - 4,000 + 0 + 8,000 = 14,000. Adding all volumes (27,000) or counting the unchanged day is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Fundamental Analysis and Technical Analysis shows your real accuracy, how long you take and where you lose marks.

Practise Fundamental Analysis and Technical AnalysisFree diagnostic mock

More Fundamental Analysis and Technical Analysis questions