Question

Determine the 5-day Simple Moving Averages for the ten consecutive day closing prices?

121.56, 121.60, 121.65, 121.65, 121.60, 121.52, 120, 120.67, 121.50, 121.45

Answer 1

The 5-day Simple Moving Averages (SMA) based on the ten consecutive day closing prices can be calculated by averaging sets of five consecutive days. Only six SMA values can be computed from ten days of data.

Step-by-step explanation:

To determine the 5-day Simple Moving Averages (SMA) for the given ten consecutive day closing prices, we will average the prices of every five consecutive days. Here are the provided closing prices:

1. 121.56
2. 121.60
3. 121.65
4. 121.65
5. 121.60
6. 121.52
7. 120
8. 120.67
9. 121.50
10. 121.45

The 5-day Simple Moving Averages are calculated as follows:

• SMA1: (121.56 + 121.60 + 121.65 + 121.65 + 121.60) / 5 = 121.612
• SMA2: (121.60 + 121.65 + 121.65 + 121.60 + 121.52) / 5 = 121.604
• SMA3: (121.65 + 121.65 + 121.60 + 121.52 + 120) / 5 = 121.284
• SMA4: (121.65 + 121.60 + 121.52 + 120 + 120.67) / 5 = 121.088
• SMA5: (121.60 + 121.52 + 120 + 120.67 + 121.50) / 5 = 121.058
• SMA6: (121.52 + 120 + 120.67 + 121.50 + 121.45) / 5 = 121.028

Note that only six 5-day SMAs can be calculated from ten days of data. To calculate the SMA, we sum up the prices of five consecutive days and divide by 5 since it is a 5-day average.