NISM Certifications · NISM-Series-XV: Research Analyst · Technical Analysis
A stock closes at the following prices over five days: Rs 100, Rs 102, Rs 104, Rs 106, Rs 108. What is the 5-day simple moving average at the end of day five?
The 5-day simple moving average is Rs 104. The five closing prices add up to Rs 520, and dividing by five gives 104. A simple moving average gives equal weight to each day in the window.
- ARs 104Correct
- BRs 106
- CRs 105
- DRs 108
Explanation
Sum = 100+102+104+106+108 = 520. Dividing by 5 gives Rs 104. Rs 106 would wrongly use only the last two prices' average or the latest weighting; Rs 108 is just the last close.
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