July 24th, 2001, 5:06 pm
Remember the Millikan Oildrop Experiment? That's Robert Millikan, the Nobel prize winning physicist, not Michael Milkin, the former junk bond king.The stock series were normalized by dividing by the initial price. However a real stock series would move up and down in whole number multiples of a basic unit. For example, if the initial price were $50.00 and the stock was quoted in eighths, the normalized series would move up and down multiples of 0.0025. To check this I took first differences of each series, and divided each difference by the minimum difference for that stock. The result should be reasonably small whole numbers showing a discretized bell-shaped curve.Four of the series, B, D, F and H did this (more or less, there were some deviations as you would expect from real data). The other four did not.This, of course, misses the point of the quiz which was to test technical analysis. The quiz could easily have been constructed to pass this granularity test. But that's how I did it.