The data below consist of the closing price of the common stock of the American
ID: 461352 • Letter: T
Question
The data below consist of the closing price of the common stock of the American Telephone and Telegraph Corporation on 10 recent trading days.
Time(t)
Price
Time(t)
Price
1
$24.10
6
$22.73
2
23.80
7
22.60
3
23.39
8
21.76
4
22.90
9
22.14
5
22.10
10
21.69
Using a five-period moving average, forecast the price of the stock for period 10.
What is the error of the forecast in #1-a?
Using a five-period moving average, forecast the price of the stock for period 11.
Time(t)
Price
Time(t)
Price
1
$24.10
6
$22.73
2
23.80
7
22.60
3
23.39
8
21.76
4
22.90
9
22.14
5
22.10
10
21.69
Explanation / Answer
A forecast for t = 10 will require the previous five prices. MA5 = (22.10 + 22.73 + 22.60 + 21.76 + 22.14/5 = $22.27 Error = Actual - Forecast = 21.69 ? 22.27 = -$0.58 MA5 =( 22.73 + 22.60 + 21.76 + 22.14 + 21.69)/5 = $22.18
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.