Question

A stock technical analyst uses smoothing methods to predict stock prices. The following table contains the monthly price information for Walmart.

Date	Price
11/30/2018	95.62
12/31/2018	91.71
1/31/2019	94.35
2/28/2019	97.46
3/29/2019	96.54
4/30/2019	101.80
5/31/2019	100.94
6/28/2019	109.95
7/31/2019	109.84
8/30/2019	114.26
9/30/2019	118.68
10/31/2019	117.26

What is the predicted share price for October 31, 2019 if this technical analyst uses a 5-month moving average method?

	A.	$107.36
	B.	$114.00
	C.	$110.73
	D.	$109.24

Answer 1

Correct Option = C. $110.73

Predicted Price for October 31, 2019, using 5-month moving average would be:

$= \frac{May + June + July + Aug + September}{5}$

$= \frac{100.94+109.95+109.84+114.26+118.68}{5}$

$\bg_green \large = \$110.73$

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.