A stock technical analyst uses smoothing methods to predict stock prices. The fo

Question

A stock technical analyst uses smoothing methods to predict stock prices. The following table contains the monthly price information for General Mills. Date Price 1/30/2015 55.33 2/27/2015 52.48 3/31/2015 53.79 4/30/2015 56.60 5/29/2015 55.34 6/30/2015 56.15 7/31/2015 55.72 8/31/2015 58.21 9/30/2015 56.76 10/30/2015 56.13 11/30/2015 58.11 12/31/2015 57.66 What is the predicted share price for June 30, 2015 if this technical analyst uses a 5-month moving average method?

A. $54.71

B. $55.95

C. $54.87

D. $54.95

Explanation / Answer

1/30/2015 55.33
2/27/2015 52.48
3/31/2015 53.79
4/30/2015 56.60
5/29/2015 55.34
5- month Moving Average method = (55.33 + 52.48 + 53.79 + 56.60 + 55.34)/5 =54.71
(Option A is correct)

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