Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Given below are the values of NSE national index for 20 trading days: 1 2 3 4 5 6 7 8 9 10 4240

image text in transcribed

2. Given below are the values of NSE national index for 20 trading days: 1 2 3 4 5 6 7 8 9 10 4240 4220 4360 4150 4110 4330 4170 4220 4230 4090 11 12 13 14 15 16 17 18 19 20 4170 4180 4270 4310 4300 4190 4170 4250 4120 4080 Assume that the estimated exponential moving average for the first day was 3900. Answer the following questions i) Calculate the Simple Moving Average (SMA) for the 3 days as well as 5 days. ii) Calculate the Exponential Moving Average (EMA) for the 20 days using: , = P1-1 + a(P-1 - -1) where a 0.1 iii) What signal does the EMA line give when juxtaposed with the price line? iv) What would you suggest regarding the choice of no. of days for computing simple moving averages? v) How is the EMA superior to a simple moving average indicator? vi) What problems do moving averages throw in predicting the share price movements? vii) Discuss the related measure of the oscillator in this regard. 2. Given below are the values of NSE national index for 20 trading days: 1 2 3 4 5 6 7 8 9 10 4240 4220 4360 4150 4110 4330 4170 4220 4230 4090 11 12 13 14 15 16 17 18 19 20 4170 4180 4270 4310 4300 4190 4170 4250 4120 4080 Assume that the estimated exponential moving average for the first day was 3900. Answer the following questions i) Calculate the Simple Moving Average (SMA) for the 3 days as well as 5 days. ii) Calculate the Exponential Moving Average (EMA) for the 20 days using: , = P1-1 + a(P-1 - -1) where a 0.1 iii) What signal does the EMA line give when juxtaposed with the price line? iv) What would you suggest regarding the choice of no. of days for computing simple moving averages? v) How is the EMA superior to a simple moving average indicator? vi) What problems do moving averages throw in predicting the share price movements? vii) Discuss the related measure of the oscillator in this regard

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Finance For Construction

Authors: Anthony Higham, Carl Bridge, Peter Farrell

1st Edition

1138941298, 978-1138941298

More Books

Students also viewed these Finance questions