These are American Express closing prices for trading days from September 2014 t

Question

These are American Express closing prices for trading days from September 2014 to September 2015.

Day Closing Price 1 88.56 2 88.98 3 88.49 4 88.45 5 87.78 6 86.77 7 87.27 8 87.28 9 86.51 10 86.25 11 87.22 12 87.92 13 88.94 14 88.54 15 87.84 16 87.17 17 87.38 18 85.64 19 87.23 20 86.82 21 86.41 22 84.96 23 85.01 24 86.29 25 86.16 26 84.50 27 86.54 28 85.03 29 84.14 30 81.96 31 81.92 32 80.12 33 79.44 34 81.76 35 83.17 36 84.79 37 83.12 38 84.76 39 85.54 40 85.77 41 87.13 42 87.46 43 87.86 44 89.05 45 89.95 46 90.47 47 91.50 48 90.67 49 91.34 50 91.48 51 90.83 52 90.64 53 90.16 54 89.77 55 89.23 56 89.68 57 89.60 58 89.72 59 89.49 60 90.13 61 90.49 62 90.54 63 91.50 64 91.22 65 92.07 66 90.34 67 90.92 68 91.73 69 92.63 70 92.43 71 91.83 72 92.20 73 90.09 74 89.14 75 87.36 76 89.54 77 92.24 78 91.97 79 92.69 80 92.89 81 93.14 82 93.35 83 93.33 84 93.33 85 92.11 86 92.09 87 89.66 88 87.75 89 89.66 90 90.93 91 89.78 92 88.87 93 88.60 94 86.46 95 85.27 96 85.43 97 86.65 98 87.05 99 83.78 100 83.54 101 82.71 102 81.82 103 81.15 104 81.42 105 80.12 106 81.55 107 83.14 108 83.02 109 84.13 110 84.41 111 84.38 112 85.24 113 85.40 114 79.91 115 77.53 116 78.52 117 79.22 118 77.85 119 79.27 120 79.73 121 80.29 122 81.59 123 82.66 124 81.02 125 81.45 126 81.33 127 80.06 128 80.58 129 79.74 130 79.94 131 78.55 132 78.89 133 80.99 134 80.03 135 80.93 136 80.49 137 81.28 138 80.97 139 82.12 140 81.62 141 80.80 142 79.55 143 77.93 144 77.42 145 77.50 146 77.83 147 78.64 148 79.40 149 79.33 150 78.04 151 78.40 152 78.86 153 79.29 154 78.97 155 79.19 156 79.45 157 80.61 158 77.03 159 76.94 160 76.99 161 78.15 162 77.86 163 77.70 164 77.20 165 77.20 166 76.87 167 77.16 168 77.39 169 77.99 170 77.55 171 77.56 172 78.14 173 78.69 174 79.40 175 78.79 176 79.56 177 80.45 178 79.92 179 79.87 180 81.06 181 80.66 182 80.46 183 80.95 184 79.89 185 79.81 186 79.79 187 79.42 188 79.17 189 79.69 190 80.30 191 79.06 192 79.09 193 78.52 194 78.87 195 79.89 196 80.00 197 79.23 198 78.95 199 79.06 200 80.02 201 80.47 202 79.89 203 80.95 204 81.06 205 80.44 206 79.58 207 79.58 208 77.51 209 77.72 210 78.40 211 78.21 212 77.59 213 77.55 214 75.93 215 76.34 216 77.31 217 78.53 218 78.97 219 78.54 220 78.92 221 79.22 222 79.30 223 78.95 224 78.99 225 77.01 226 75.90 227 74.92 228 75.11 229 75.70 230 76.12 231 76.06 232 75.98 233 75.72 234 75.59 235 75.00 236 79.72 237 81.26 238 81.34 239 81.00 240 80.76 241 80.91 242 81.00 243 81.24 244 80.95 245 78.76 246 77.03 247 74.65 248 73.52 249 75.63 250 76.88 251 76.65 252 76.72 253 74.00 The file P12 16.xlsx contains the daily closing prices of American Express stock for a one-year period. a. Using a span of 3, forecast the price of this stock 25. for the next trading day with the moving average method. How well does this method with span 3 forecast the known observations in this series? b. Repeat part a with a span of 10. c. Which of these two spans appears to be more appropriate? Justify your choice.

Explanation / Answer

Generally a shorter period moving average will track the price closely while a long perios moving average may not predict the even the nearest price, it can lag behind.One more reason to choose shorter period time is that investors may not like to wait and calculate for longer period, they trade very frequently, thus shorter period moving average is better.

But the disadvantage may be - faster you decide to make a trade, the less time you have for the decision, and the less information you have available at the moment of making it. so it can also become wrong method.so the best will be based on your market research and analysis.

Day

Day

Closing Price 3 days span 10 days span 1 88.56 2 88.98 3 88.49 4 88.45 88.67666667 5 87.78 88.64 6 86.77 88.24 7 87.27 87.66666667 8 87.28 87.27333333 9 86.51 87.10666667 10 86.25 87.02 11 87.22 86.68 87.634 12 87.92 86.66 87.5 13 88.94 87.13 87.394 14 88.54 88.02666667 87.439 15 87.84 88.46666667 87.448 16 87.17 88.44 87.454 17 87.38 87.85 87.494 18 85.64 87.46333333 87.505 19 87.23 86.73 87.341 20 86.82 86.75 87.413 21 86.41 86.56333333 87.47 22 84.96 86.82 87.389 23 85.01 86.06333333 87.093 24 86.29 85.46 86.7 25 86.16 85.42 86.475 26 84.5 85.82 86.307 27 86.54 85.65 86.04 28 85.03 85.73333333 85.956 29 84.14 85.35666667 85.895 30 81.96 85.23666667 85.586 31 81.92 83.71 85.1 32 80.12 82.67333333 84.651 33 79.44 81.33333333 84.167 34 81.76 80.49333333 83.61 35 83.17 80.44 83.157 36 84.79 81.45666667 82.858 37 83.12 83.24 82.887 38 84.76 83.69333333 82.545 39 85.54 84.22333333 82.518 40 85.77 84.47333333 82.658 41 87.13 85.35666667 83.039 42 87.46 86.14666667 83.56 43 87.86 86.78666667 84.294 44 89.05 87.48333333 85.136 45 89.95 88.12333333 85.865 46 90.47 88.95333333 86.543 47 91.5 89.82333333 87.111 48 90.67 90.64 87.949 49 91.34 90.88 88.54 50 91.48 91.17 89.12 51 90.83 91.16333333 89.691 52 90.64 91.21666667 90.061 53 90.16 90.98333333 90.379 54 89.77 90.54333333 90.609 55 89.23 90.19 90.681 56 89.68 89.72 90.609 57 89.6 89.56 90.53 58 89.72 89.50333333 90.34 59 89.49 89.66666667 90.245 60 90.13 89.60333333 90.06 61 90.49 89.78 89.925 62 90.54 90.03666667 89.891 63 91.5 90.38666667 89.881 64 91.22 90.84333333 90.015 65 92.07 91.08666667 90.16 66 90.34 91.59666667 90.444 67 90.92 91.21 90.51 68 91.73 91.11 90.642 69 92.63 90.99666667 90.843 70 92.43 91.76 91.157 71 91.83 92.26333333 91.387 72 92.2 92.29666667 91.521 73 90.09 92.15333333 91.687 74 89.14 91.37333333 91.546 75 87.36 90.47666667 91.338 76 89.54 88.86333333 90.867 77 92.24 88.68 90.787 78 91.97 89.71333333 90.919 79 92.69 91.25 90.943 80 92.89 92.3 90.949 81 93.14 92.51666667 90.995 82 93.35 92.90666667 91.126 83 93.33 93.12666667 91.241 84 93.33 93.27333333 91.565 85 92.11 93.33666667 91.984 86 92.09 92.92333333 92.459 87 89.66 92.51 92.714 88 87.75 91.28666667 92.456 89 89.66 89.83333333 92.034 90 90.93 89.02333333 91.731 91 89.78 89.44666667 91.535 92 88.87 90.12333333 91.199 93 88.6 89.86 90.751 94 86.46 89.08333333 90.278 95 85.27 87.97666667 89.591 96 85.43 86.77666667 88.907 97 86.65 85.72 88.241 98 87.05 85.78333333 87.94 99 83.78 86.37666667 87.87 100 83.54 85.82666667 87.282 101 82.71 84.79 86.543 102 81.82 83.34333333 85.836 103 81.15 82.69 85.131 104 81.42 81.89333333 84.386 105 80.12 81.46333333 83.882 106 81.55 80.89666667 83.367 107 83.14 81.03 82.979 108 83.02 81.60333333 82.628 109 84.13 82.57 82.225 110 84.41 83.43 82.26 111 84.38 83.85333333 82.347 112 85.24 84.30666667 82.514 113 85.4 84.67666667 82.856 114 79.91 85.00666667 83.281 115 77.53 83.51666667 83.13 116 78.52 80.94666667 82.871 117 79.22 78.65333333 82.568 118 77.85 78.42333333 82.176 119 79.27 78.53 81.659 120 79.73 78.78 81.173 121 80.29 78.95 80.705 122 81.59 79.76333333 80.296 123 82.66 80.53666667 79.931 124 81.02 81.51333333 79.657 125 81.45 81.75666667 79.768 126 81.33 81.71 80.16 127 80.06 81.26666667 80.441 128 80.58 80.94666667 80.525 129 79.74 80.65666667 80.798 130 79.94 80.12666667 80.845 131 78.55 80.08666667 80.866 132 78.89 79.41 80.692 133 80.99 79.12666667 80.422 134 80.03 79.47666667 80.255 135 80.93 79.97 80.156 136 80.49 80.65 80.104 137 81.28 80.48333333 80.02 138 80.97 80.9 80.142 139 82.12 80.91333333 80.181 140 81.62 81.45666667 80.419 141 80.8 81.57 80.587 142 79.55 81.51333333 80.812 143 77.93 80.65666667 80.878 144 77.42 79.42666667 80.572 145 77.5 78.3 80.311 146 77.83 77.61666667 79.968 147 78.64 77.58333333 79.702 148 79.4 77.99 79.438 149 79.33 78.62333333 79.281 150 78.04 79.12333333 79.002 151 78.4 78.92333333 78.644 152 78.86 78.59 78.404 153 79.29 78.43333333 78.335 154 78.97 78.85 78.471 155 79.19 79.04 78.626 156 79.45 79.15 78.795 157 80.61 79.20333333 78.957 158 77.03 79.75 79.154 159 76.94 79.03 78.917 160 76.99 78.19333333 78.678 161 78.15 76.98666667 78.573 162 77.86 77.36 78.548 163 77.7 77.66666667 78.448 164 77.2 77.90333333 78.289 165 77.2 77.58666667 78.112 166 76.87 77.36666667 77.913 167 77.16 77.09 77.655 168 77.39 77.07666667 77.31 169 77.99 77.14 77.346 170 77.55 77.51333333 77.451 171 77.56 77.64333333 77.507 172 78.14 77.7 77.448 173 78.69 77.75 77.476 174 79.4 78.13 77.575 175 78.79 78.74333333 77.795 176 79.56 78.96 77.954 177 80.45 79.25 78.223 178 79.92 79.6 78.552 179 79.87 79.97666667 78.805 180 81.06 80.08 78.993 181 80.66 80.28333333 79.344 182 80.46 80.53 79.654 183 80.95 80.72666667 79.886 184 79.89 80.69 80.112 185 79.81 80.43333333 80.161 186 79.79 80.21666667 80.263 187 79.42 79.83 80.286 188 79.17 79.67333333 80.183 189 79.69 79.46 80.108 190 80.3 79.42666667 80.09 191 79.06 79.72 80.014 192 79.09 79.68333333 79.854 193 78.52 79.48333333 79.717 194 78.87 78.89 79.474 195 79.89 78.82666667 79.372 196 80 79.09333333 79.38 197 79.23 79.58666667 79.401 198 78.95 79.70666667 79.382 199 79.06 79.39333333 79.36 200 80.02 79.08 79.297 201 80.47 79.34333333 79.269 202 79.89 79.85 79.41 203 80.95 80.12666667 79.49 204 81.06 80.43666667 79.733 205 80.44 80.63333333 79.952 206 79.58 80.81666667 80.007 207 79.58 80.36 79.965 208 77.51 79.86666667 80 209 77.72 78.89 79.856 210 78.4 78.27 79.722 211 78.21 77.87666667 79.56 212 77.59 78.11 79.334 213 77.55 78.06666667 79.104 214 75.93 77.78333333 78.764 215 76.34 77.02333333 78.251 216 77.31 76.60666667 77.841 217 78.53 76.52666667 77.614 218 78.97 77.39333333 77.509 219 78.54 78.27 77.655 220 78.92 78.68 77.737 221 79.22 78.81 77.789 222 79.3 78.89333333 77.89 223 78.95 79.14666667 78.061 224 78.99 79.15666667 78.201 225 77.01 79.08 78.507 226 75.9 78.31666667 78.574 227 74.92 77.3 78.433 228 75.11 75.94333333 78.072 229 75.7 75.31 77.686 230 76.12 75.24333333 77.402 231 76.06 75.64333333 77.122 232 75.98 75.96 76.806 233 75.72 76.05333333 76.474 234 75.59 75.92 76.151 235 75 75.76333333 75.811 236 79.72 75.43666667 75.61 237 81.26 76.77 75.992 238 81.34 78.66 76.626 239 81 80.77333333 77.249 240 80.76 81.2 77.779 241 80.91 81.03333333 78.243 242 81 80.89 78.728 243 81.24 80.89 79.23 244 80.95 81.05 79.782 245 78.76 81.06333333 80.318 246 77.03 80.31666667 80.694 247 74.65 78.91333333 80.425 248 73.52 76.81333333 79.764 249 75.63 75.06666667 78.982 250 76.88 74.6 78.445 251 76.65 75.34333333 78.057 252 76.72 76.38666667 77.631 253 74 76.75 77.203

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