INVESTMENTS(LL)W/CONNECT
INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 12, Problem 18PS
Summary Introduction

To identify:

The signals for any buy or sell by using table9.3and computing five days moving average for computer Inc.

Introduction:

Industry Analysis: It is a most important puppet which was used to compare a specified company's performance with the other's market in the same industry market.

Expert Solution & Answer
Check Mark

Explanation of Solution

Given:

Table9.3

INVESTMENTS(LL)W/CONNECT, Chapter 12, Problem 18PS

Detailed explanation / work out of the complete problem.

    Days Moving average formula Moving average Action

      1 to 5

      19.63+20+20.50+22+21.135

      20.62

      2 to 6

      20+20.50+22+21.13+225

      21.13

      3 to 7

      20.50+22+21.13+22+21.885=107.515

      21.50

      4 to 8

      22+21.13+22+21.88+22.55=109.515

      21.90

      5 to 9

      21.13+22+21.88+22.5+23.135=110.645

      22.13

      6 to 10

      22+21.88+22.5+23.13+23.885=113.395

      22.68

      7 to 11

      21.88+22.5+23.13+23.88+24.505=115.895

      23.18

      8 to 12

      22.5+23.13+23.88+24.50+23.255=117.265

      23.45
    Selling point

      9 to 13

      23.13+23.88+24.50+23.25+22.135=116.895

      23.38

      10 to 14

      23.88+24.50+23.25+22.13+225=115.765

      23.15

      11 to 15

      24.50+23.25+22.13+22+20.635=112.515

      22.50

      12 to 16

      23.25+22.13+22+20.63+20.255=108.265

      21.65

      13 to 17

      22.13+22+20.63+20.25+19.755=104.765

      20.95

      14 to 18

      22+20.63+20.25+19.75+18.755=101.355

      20.28

      15 to 19

      20.63+20.25+19.75+18.75+17.505=96.885

      19.38

      16 to 20

      20.25+19.75+18.75+17.50+195=95.255

      19.05

      17 to 21

      19.75+18.75+17.50+19+19.635=94.635

      18.93
    Buying point

      18 to 22

      18.75+17.50+19+19.63+21.505=96.385

      19.28

We see that in9 to 13, the trading price of13inday is lower than a8thday so our selling point is when the price is high i.e. on12thday which is$23.45.

And further, we see that22ndday value is high from17thday's value so on1721stday's average is the best point for buying the stock of computer Inc.

Conclusion

From the above, the selling point is12thday and buying point is the21thday of Computer Inc.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
How much do investor psychology and market sentiment play into stock price movements? Do these emotional reactions having a bigger impact on short-term swings, or do they also shape long-term trends in a meaningful way?
Explain The business of predatory tax return preparation, including: How they deceive the working poor,The marketing tactics the preparers use, and Other than paying high fees, what negative impact can the use of these unqualified and unregulated preparers have on the taxpayer?
Explain the changes in tax return preparation you would like to see in Alabama, based on what has been successful in other states.
Knowledge Booster
Background pattern image
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Text book image
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Text book image
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Text book image
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Text book image
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Portfolio return, variance, standard deviation; Author: MyFinanceTeacher;https://www.youtube.com/watch?v=RWT0kx36vZE;License: Standard YouTube License, CC-BY