Price and volume of shares traded of Salem Industries on four consecutive days are shown below. $$\begin{array} { | l | l | l | l | }
\hline\text { Monday } & \text { Tuesday } & \text { Wedriesday } & \text { Thursday } \
\hline \$ 27 & \$ 26 & \$ 28 & \$ 30 \
\hline 100,000 & 80,000 & 70,000 & 110,000 \
\hline
\end{array}$$ Compute Salem's on balance volume at the end of Thursday's trading. Assume last Friday's closing price was $26.50. Start with a base of zero for on balance volume leading into Monday's trading day.

Question

Price and volume of shares traded of Salem Industries on four consecutive days are shown below. $$\begin{array} { | l | l | l | l | } 
\hline\text { Monday } & \text { Tuesday } & \text { Wedriesday } & \text { Thursday } \
\hline \$ 27 & \$ 26 & \$ 28 & \$ 30 \
\hline 100,000 & 80,000 & 70,000 & 110,000 \
\hline
\end{array}$$ Compute Salem's on balance volume at the end of Thursday's trading. Assume last Friday's closing price was $26.50. Start with a base of zero for on balance volume leading into Monday's trading day.

Quizplus · Accepted Answer

The On Balance Volume (OBV) is calculated by adding the day's volume to a running total when the security's price closes up, and subtracting the day's volume when the security's price closes down. Starting with a base of zero for Monday and considering last Friday's closing price of $26.50:- Monday's closing price is $27, which is higher than Friday's $26.50, so we add Monday's volume: 0 + 100,000 = 100,000.- Tuesday's closing price is $26, lower than Monday's $27, so we subtract Tuesday's volume: 100,000 - 80,000 = 20,000.- Wednesday's closing price is $28, higher than Tuesday's $26, so we add Wednesday's volume: 20,000 + 70,000 = 90,000.- Thursday's closing price is $30, higher than Wednesday's $28, so we add Thursday's volume: 90,000 + 110,000 = 200,000.Therefore, the OBV at the end of Thursday's trading is 200,000.

Price and Volume of Shares Traded of Salem Industries on Four