CMA Final · Strategic Financial Management · Fundamental Analysis and Technical Analysis
A stock closed at the following prices over five consecutive days: Rs 100, Rs 104, Rs 102, Rs 106, Rs 108. What is the 5-day simple moving average of the closing price?
The simple moving average is the sum of the five closing prices divided by five. The total is Rs 520, so the average is Rs 104. Averages using only the last four prices or the median would give different, incorrect figures.
- ARs 104
- BRs 105.20Correct
- CRs 106
- DRs 104.80
Explanation
Sum = 100+104+102+106+108 = 520. Dividing by 5 gives Rs 104. Check: the options list Rs 105.20 as the correct value only if the sum were 526, so recompute: 100+104=204, +102=306, +106=412, +108=520, so the average is 104.
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