CMA Final · Strategic Financial Management · Fundamental Analysis and Technical Analysis
A stock closed at the following prices over five consecutive days: Rs 200, Rs 204, Rs 208, Rs 202, Rs 206. What is the 5-day simple moving average at the close of the fifth day?
The 5-day simple moving average is Rs 204. It is found by adding the five closing prices, which total Rs 1,020, and dividing by five. The latest price of Rs 206 is not the average, because every price in the window gets equal weight.
- ARs 202
- BRs 204Correct
- CRs 206
- DRs 208
Explanation
Simple moving average = (200 + 204 + 208 + 202 + 206) / 5 = 1020 / 5 = Rs 204. Choosing Rs 206 uses only the latest closing price, ignoring the average of the window.
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