At the beginning of the month, the healthcare index was 134 and the stock market index was 2100. At the end of the month, the healthcare index was 147 and the stock market index was 2214. Consider the ratio of the healthcare index to the market index at the beginning and end of the month. The healthcare index is ________ the market index, and technical analysts who use relative strength would advise ________ the healthcare index.
A) underperforming; buying
B) underperforming; selling
C) outperforming; buying
D) outperforming; selling

Question

Quizplus · Accepted Answer

The ratio of the healthcare index to the market index at the beginning of the month is 134/2100, which simplifies to 0.0638. At the end of the month, the ratio is 147/2214, which simplifies to 0.0664. This shows that the healthcare index outperformed the market index over the course of the month. Therefore, choice C (outperforming; buying) is the correct answer.

At the Beginning of the Month, the Healthcare Index Was