The index value in each week is then updated by multiplying the previous week’s level by (1 + Rate of return over previous week).

b. Identify every instance in which the index crosses through its moving average from below.
In how many of the weeks following a cross-through does the index increase? Decrease?

c. Identify every instance in which the index crosses through its moving average from above.
In how many of the weeks following a cross-through does the index increase? Decrease?

d. How well does the moving average rule perform in identifying buy or sell opportunities?