The table below shows the closing monthly stock prices for IBM and Amazon. Calcu

Question

The table below shows the closing monthly stock prices for IBM and Amazon. Calculate the simple three-month moving average for each month for both companies. (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.) IBM AMZN January February March April May June July August September October November December 169.64 600.36 173.29 613.40 180.13 586.76 195.81 544.10 196.69 529.02 204.49 506.38 222.52 603.69 215.23 540.96 216.23 515.04 213.51 592.64 192.29 599.39 173.10 645.90 IBM AMZN March ril May June July August September October November December

Explanation / Answer

A simple moving average (SMA) is an arithmetic moving average calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods.

That is

3 month SMA for march in case of IBM is

(closing price in january + closing price in february + closing price in march)/3

Note: it is divided by 3 because it is a 3 month period. If it is a 6 month period then all the six month prices should be added and it should be divided by 6

=(169.64+173.29+180.13)/3 = 174.35

similarily 3 month SMA for april in case of IBM is

(closing price in february + closing price in march+closing price in april) / 3

and so on

same procedure for Amazon as well

lets fill the table by following this procedure

Months IBM Amazon March 174.35 600.17 April 183.07 581.42 may 190.87 553.29 june 198.99 526.5 july 207.9 546.36 august 214.08 550.34 september 217.99 553.23 october 214.99 549.54 november 207.34 569.02 december 192.96 612.64

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.