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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.

  1. ARs 104Correct
  2. BRs 106
  3. CRs 105
  4. 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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