Question

QUESTION 1: In Exercises 5–8, use the method illustrated in Example 2 to determine moving averages by subtraction and addition. Determine the 6-day SMA for the ten consecutive trading day closing prices for SunEdison Inc. Listed below. $2.65, $2.63, $2.70, $2.63, $2.50, $2.65, $2.66, $2.56, $2.52, $2.37 * 5 points

Answer 1

Answer:

The 6-day SMA for the ten consecutive trading day

= $2.63,  $2.63,  $2.62,  $2.59,  $2.54

Step-by-step explanation:

Determining the 6-day SMA for the given values

using the addition and subtraction methodology

First we will determine the Average closing prices for 1 - 6 days

=  $\frac{2.65 + 2.63 + 2.70 + 2.63 + 2.5 + 2.65}{6}$  =  15.76 / 6 =  $2.626 ≈ $2.63

next we have to determine the SMA for days 2 - 7

= 2.63 - $\frac{2.65}{6} + \frac{2.66}{6}$  =  $\frac{15.77}{6}$  ≈ $2.63

SMA for days 3 - 8

= 2.63 -  $\frac{2.63}{6} +\frac{2.56}{6} = \frac{15.70}{6}$ ≈  $2.62

SMA for days 4 - 9

= 2.62 - $\frac{2.70}{6} + \frac{2.52}{6} = \frac{15.52}{6}$  ≈  $2.59

SMA for days 5 - 10

= 2.59 - $\frac{2.63}{6} + \frac{2.37}{6} = \frac{15.26}{6}$  ≈  $2.54

Hence the 6-day SMA for the ten consecutive trading day

= $2.63, $2.63, $2.62, $2.59, $2.54