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(4 points) The method of moving averages is used for which of the following purposes?...

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Finance

(4 points) The method of moving averages is used for which of the following purposes?

(a) Estimate the trend of a stock price data.

(b) Smooth the stock price data.

(c) Estimate the volatility of a stock.

(d) Estimate the total return of a stock.

(e) Estimate the price return of a stock.

4. (5 points) An investor wants to form a portfolio using 5 stocks; A, B, C, D, and E. He wants to put half his money in stock A, an equal amount in B and C, and a tenth of his money in stock D. If Es weight is 20%, what is Bs weight? Show all your work. 2

5. (6 points) Consider the below table that shows the close prices of two stock over five days:

Close Price

Date Stock 1 Stock 2

02-08-2021 $14.1 $18.2

02-09-2021 $13.8 $18.4

02-10-2021 $14.5 $18.7

02-11-2021 $14.9 $18.9

02-12-2021 $15.2 $19.3

If you were to invest in both stocks, which of the two investments perform better from February 8, 2021 to February 12, 2021 based solely in price appreciation? Be specific. Explain.

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