On day 1, the stock price of Ford was $12 and the automotive stock index was 127. On day 2, the stock price of Ford was $15 and the automotive stock index was 139. Consider the ratio of Ford to the automotive stock index at day 1 and day 2. Ford is ________ the automotive industry, and technical analysts who follow relative strength would advise ________ the stock.
A) outperforming; buying
B) outperforming; selling
C) underperforming; buying
D) underperforming; selling

Question

Quizplus · Accepted Answer

Day 1 Ratio = 11eaaae8_8b5e_ed4e_a4b8_e945a4e97d50_TB6474_11 = 0.09449
Day 2 Ratio = 11eaaae8_8b5f_145f_a4b8_f138f009c834_TB6474_11 = 0.107914
Since the ratio is increasing, the relative strength of Ford is improving; it is outperforming and should be bought.

On Day 1, the Stock Price of Ford Was $12