Use the data below to construct the advance/decline line for the stock market. V
ID: 2775336 • Letter: U
Question
Use the data below to construct the advance/decline line for the stock market. Volume figures are in thousands of shares and are from November 2–6, 2009. (Input all amounts as positive values.)
Stocks
Advancing
Advancing
Volume
Stocks
Declining
Declining
Volume
Monday
1,831
687,133
1,438
596,144
Tuesday
2,225
553,360
1,520
450,885
Wednesday
1,837
625,244
1,446
721,137
Thursday
2,482
1,116,422
552
174,548
Friday
1,712
512,450
1,474
496,710
Adv./Dec.
Cumulative
Monday
Tuesday
Wednesday
Thursday
Friday
Construct the Arms ratio on each of the five trading days. (Round your answer to 3 decimal places. Input all amounts as positive values.)
Stocks
Advancing
Advancing
Volume
Stocks
Declining
Declining
Volume
Monday
1,819
691,343
1,524
598,193
Tuesday
2,372
453,360
1,957
452,973
Wednesday
1,825
625,744
1,532
721,549
Thursday
2,458
1,120,446
556
174,960
Friday
1,760
513,426
1,478
496,210
Arms ratio
Monday
Tuesday
Wednesday
Thursday
Friday
The table below shows the closing monthly stock prices for Stock 1 and Stock 2 during 2009. Calculate the simple three-month moving average for each month for both companies. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the "$" sign in your response.)
Stock 1
Stock 2
January
92.20
320.65
February
99.60
355.43
March
104.31
363.99
April
114.64
387.06
May
119.83
525.97
June
115.74
447.06
July
126.95
541.95
August
128.02
518.06
September
119.02
500.67
October
134.93
547.59
November
157.38
590.59
December
167.98
622.00
Stock 1
Stock 2
March
$
$
April
May
June
July
August
September
October
November
December
Calculate the exponential three-month moving average for both stocks where two-thirds of the average weight is placed on the most recent price. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the "$" sign in your response.)
Stock 1
Stock 2
January
55.48
309.65
February
61.42
341.13
March
70.87
341.99
April
81.20
354.06
May
86.39
415.97
June
82.30
414.06
July
90.32
431.95
August
91.39
454.59
September
82.39
467.67
October
98.30
503.81
November
120.75
544.50
December
131.35
589.00
Stock 1
Stock 2
March
$
$
April
May
June
July
August
September
October
November
December
Use the data below to construct the advance/decline line for the stock market. Volume figures are in thousands of shares and are from November 2–6, 2009. (Input all amounts as positive values.)
Explanation / Answer
Solution: To find out AD line we need to find out net advances or declines by sutracting number of advances and number of declines and them finding out their cumulatives at the end column. That coulmn of AD line now can be used to plot a graph.
For calculation Arms ratio we have to calculate AD ratio which is ratio of number of advances by decline and AD volume ratio which is ratio og advance volumes by decline. Then Arms ratio = AD ratio/AD volume ratio
Stocks Advancing Stocks Declining
Advancing Volume Declining Volume AD Ratio AD Volume Ratio Arms ratio
Monday 1,819 691,343 1,524 598,193 1.193569554 1.155718974 1.032751
Tuesday 2,372 453,360 1,957 452,973 1.212059274 1.000854356 1.211025
Wednesday 1,825 625,744 1,532 721,549 1.191253264 0.867223155 1.373641
Thursday 2,458 1,120,446 556 174,960 4.420863309 6.404012346 0.690327
Friday 1,760 513,426 1,478 496,210 1.190798376 1.034694988 1.150869
For three months moving average we can use this average formula = a+b+c / 3
Stock 1 3Months Moving Average Stock 2 3Months Moving Average
January 92.20 320.65
February 99.60 355.43
March 104.31 98.703333 363.99 363.99
April 114.64 106.18333 387.06 387.06
May 119.83 112.92667 525.97 525.97
June 115.74 116.73667 447.06 447.06
July 126.95 120.84 541.95 541.95
August 128.02 123.57 518.06 518.06
September 119.02 124.66333 500.67 500.67
October 134.93 127.32333 547.59 547.59
November 157.38 137.11 590.59 590.59
December 167.98 153.43 622.00 622.00
For calculating 3 months exponential moving average we need to use this formula
Where:
X = Current EMA (i.e. EMA to be calculated)
C = Current original data value
K = Smoothing Constant
P = Previous EMA
Smoothing constant can be caculated by using this formula:
K = 2 / (1+n)
therefore for this problem smoothing constant K = 2/(1+3) = 0.5 for n = 3 months
And then we can find the EMA like this:
Stock 1 Stock 2 3 Months Exponential Moving Average
January 55.48 55.48 309.65
February 61.42 58.45 341.13 325.39
March 70.87 66.15 341.99 341.56
April 81.20 76.04 354.06 348.025
May 86.39 83.80 415.97 385.015
June 82.30 84.35 414.06 415.015
July 90.32 86.31 431.95 423.005
August 91.39 90.86 454.59 443.27
September 82.39 86.89 467.67 461.13
October 98.30 90.35 503.81 485.74
November 120.75 109.53 544.50 524.155
December 131.35 126.05 589.00 566.75
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