CMA Final · Strategic Financial Management · Fundamental Analysis and Technical Analysis
A stock in an uptrend has a 12-day EMA of Rs 250 on the previous day. Today's close is Rs 263. Using the smoothing factor 2/(n+1), what is today's 12-day EMA?
Today's 12-day EMA is Rs 252. The smoothing factor is 2/13, and the gap between today's close of Rs 263 and the previous EMA of Rs 250 is Rs 13. Adding 2/13 of Rs 13, which is Rs 2, to Rs 250 gives Rs 252.
- ARs 252.00
- BRs 254.00Correct
- CRs 256.50
- DRs 257.00
Explanation
Multiplier = 2/13. EMA = 250 + (2/13)(263 - 250) = 250 + (2/13)(13) = 250 + 2 = Rs 252. Checking the options: Rs 252 is correct, so option 0 must be the key.
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