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9.1 Information Design

9.1 Information Design
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  • 15. Describing Variables in a Candlestick Chart for Stock Price

    A candlestick chart can be used to monitor the movements of a stock price. Describe the variables displayed in the graph. (See Example 5 and Example 6.)

    • Worked-Out Solution
      • The horizontal axis shows the day for which information about stock prices is shown. Stock prices for Monday through Friday are charted from left to right.
      • The color of the candlestick body indicates the type of change between the opening price and the closing price for the day. Green indicates a gain and red indicates a loss.
      • The amount of change on a given day is the gain or loss for the day. The amount of change is given by the difference of the prices indicated by the top and bottom of the candlestick body.
      • The opening price depends on the color of the candlestick body. When it is green, the opening price is indicated by the bottom of the candlestick body and when it is red, the opening price is indicated by the top of the candlestick body.
      • The closing price depends on the color of the candlestick body. When it is green, the closing price is indicated by the top of the candlestick body and when it is red, the closing price is indicated by the bottom of the candlestick body.
      • The upper "wick" or "shadow" of the candlestick extends to the highest price reached by the stock during the day.
      • The lower shadow extends to the lowest price reached by the stock during the day.
      • The range of prices for the day includes the lowest price, the highest price, and all prices in between.
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     _    _     _____    ______     _____    _    _   
    | || | ||  |  ___|| |      \\  |  ___|| | \  / || 
    | || | ||  | ||__   |  --  //  | ||__   |  \/  || 
    | \\_/ ||  | ||__   |  --  \\  | ||__   | .  . || 
     \____//   |_____|| |______//  |_____|| |_|\/|_|| 
      `---`    `-----`  `------`   `-----`  `-`  `-`  
                                                      
    
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  • 16. Reading a Candlestick Chart

    A candlestick chart can be used to monitor the movements of a stock price. What does it mean when the candlestick is green? red? (See Example 5 and Example 6.)

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     _    _      ___      ____     _    _    __   _   
    | || | ||   / _ \\   |  _ \\  | || | || | || | || 
    | || | ||  / //\ \\  | |_| || | || | || | '--' || 
    | \\_/ || |  ___  || | .  //  | \\_/ || | .--. || 
     \____//  |_||  |_|| |_|\_\\   \____//  |_|| |_|| 
      `---`   `-`   `-`  `-` --`    `---`   `-`  `-`  
                                                      
    
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  • 17. Using a Candlestick Chart to Find the Opening Price of a Stock

    A candlestick chart can be used to monitor the movements of a stock price. What is the opening price on Monday? Tuesday? (See Example 5 and Example 6.)

    • Worked-Out Solution

      To determine the opening price of the stock on a given day, consider the color of the candlestick.

      The candlestick that represents the stock price on Monday is green, so the price had a net gain and the bottom of the candlestick body indicates that the opening cost was $22.50.

      The candlestick that represents the stock price on Tuesday is red, so the price had a net loss and the top of the candlestick body indicates that the opening cost was $22.75.

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     _    _     _____    ______     _____     ______  
    | || | ||  |  ___|| |      \\  |  ___||  /_____// 
    | || | ||  | ||__   |  --  //  | ||__    `____ `  
    | \\_/ ||  | ||__   |  --  \\  | ||__    /___//   
     \____//   |_____|| |______//  |_____||  `__ `    
      `---`    `-----`  `------`   `-----`   /_//     
                                             `-`      
    
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  • 18. Using a Candlestick Chart to Find the Closing Price of a Stock

    A candlestick chart can be used to monitor the movements of a stock price. What is the closing price on Wednesday? Thursday? (See Example 5 and Example 6.)

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     __   _    __   __    _____     ______    ____    
    | || | ||  \ \\/ //  /  ___||  /_   _//  |  _ \\  
    | '--' ||   \ ` //  | // __     -| ||-   | |_| || 
    | .--. ||    | ||   | \\_\ ||   _| ||_   | .  //  
    |_|| |_||    |_||    \____//   /_____//  |_|\_\\  
    `-`  `-`     `-`'     `---`    `-----`   `-` --`  
                                                      
    
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  • 19. Using a Candlestick Chart to Find the Greatest Daily Gain or Loss

    A candlestick chart can be used to monitor the movements of a stock price. On which day did the stock have the greatest gain? loss? (See Example 5 and Example 6.)

    • Worked-Out Solution

      The greatest daily gain is indicated by the tallest green candlestick body. By visual comparison, the tallest green candlestick body is the one for Wednesday.

      The greatest daily loss is indicated by the tallest red candlestick body. By visual comparison, the tallest red candlestick body is the one for Thursday.

      The amounts of the greatest gain and the greatest loss are calculated below.

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     __   __    _____    _____     _    _    _    _   
     \ \\/ //  |  ___|| |  __ \\  | || | || | |  | || 
      \   //   | ||__   | |  \ || | || | || | |/\| || 
      / . \\   | ||__   | |__/ || | \\_/ || |  /\  || 
     /_//\_\\  |_____|| |_____//   \____//  |_// \_|| 
     `-`  --`  `-----`   -----`     `---`   `-`   `-` 
                                                      
    
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  • 20. Reading a Candlestick Chart

    A candlestick chart can be used to monitor the movements of a stock price. Explain why the candlestick for Wednesday does not have a lower shadow. (See Example 5 and Example 6.)

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       _____    ______               ___     _    _   
      / ___//  /_   _//     ___     / _ \\  | || | || 
      \___ \\   -| ||-     /   ||  | / \ || | || | || 
      /    //   _| ||_    | [] ||  | \_/ || | \\_/ || 
     /____//   /_____//    \__ ||   \___//   \____//  
    `-----`    `-----`      -|_||   `---`     `---`   
                             `-`                      
    
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  • 21. Using a Candlestick Chart to Find the Highest Percent Return

    A candlestick chart can be used to monitor the movements of a stock price. What is the highest percent return you could have earned during this week? Explain your reasoning. (See Example 5 and Example 6.)

    • Worked-Out Solution

      You would have earned the highest percent return by buying the stock at its lowest price of $22.00 on Monday and selling the stock at its highest price of $24.75 on Friday. So, for each share you would have earned

      To find the highest percent return you could have earned, divide the earnings per share by the price to buy each share.

      The highest percent return you could have earned is 12.5%

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       _____    ______   _____     _    _    __   __  
      / ___//  /_   _// |  __ \\  | || | ||  \ \\/ // 
      \___ \\   -| ||-  | |  \ || | || | ||   \   //  
      /    //   _| ||_  | |__/ || | \\_/ ||   / . \\  
     /____//   /_____// |_____//   \____//   /_//\_\\ 
    `-----`    `-----`   -----`     `---`    `-`  --` 
                                                      
    
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  • 22. Comparing Stock Price Charts

    A candlestick chart can be used to monitor the movements of a stock price. Use the Internet to find other ways to display stock prices. Which type of design do you prefer? (See Example 5 and Example 6.)

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     _    _    _    _     _____    __   __    _____   
    | |  | || | || | ||  / ____||  \ \\/ //  / ____|| 
    | |/\| || | || | || / //---`'   \ ` //  / //---`' 
    |  /\  || | \\_/ || \ \\___      | ||   \ \\___   
    |_// \_||  \____//   \_____||    |_||    \_____|| 
    `-`   `-`   `---`     `----`     `-`'     `----`  
                                                      
    
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