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Month 11's predicted 3-month moving average would be most closely associated with 68.35.
Investors and traders use a moving average as a technical indicator to identify the direction of a security's trend. It is calculated by summing all the data points collected over a certain time period and dividing the result by the total number of time periods. Technical traders can create trading signals with the aid of moving averages.
alpha(α) = 0.3
10th month exponential forecast = 67.60
Actual for month 10 = 70.1
Therefore, the 11th month's exponential forecast can be calculated as follows:
11-month exponential prediction
= Exponential forecast for month 10 + [α * (Actual for month 10-Exponential forecast for month 10)]
= 67.60 + [0.3 * (70.1 - 67.60)]
= 67.60 + 0.75
= 68.35
So its correct answer is B i.e. 68.35
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COMPLETE QUESTION:
Month Fund Price 639 680 2 3 4 5 6 7 8 9 10 672 653 62 693 70.1 Question 1 0.5 Given the monthly share price data in this spreadsheet, the 3-month moving average forecast for month 11 would be closest to:
70.2
68.3
68.9
71.