NISM Certifications · NISM-Series-XV: Research Analyst · Technical Analysis
A stock closed at Rs 100, 104, 108, 112 and 116 on five consecutive days. What is the 5-day simple moving average on the fifth day?
The 5-day simple moving average is Rs 108. Add the five closing prices to get Rs 540, then divide by five. The latest close of Rs 116 is not the average, since a simple moving average gives equal weight to all five days.
- ARs 108Correct
- BRs 110
- CRs 112
- DRs 116
Explanation
Sum = 100+104+108+112+116 = 540. Dividing by 5 gives 108. Rs 116 is just the latest close, and Rs 112 results from ignoring the first price and taking a wrong base.
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