Imagine that the Mini-Dow Average (MDA) is calculated by adding up the closing prices of five stocks and dividing that sum by a divisor. The divisor used in the calculation of the MDA is currently 0.775. The closing prices for each of the five stocks in the MDA today and exactly 1 year ago, when the divisor was 0.815, are given in the following table: . a. Calculate the percentage change in each stock. Based on this, is your sense that the market is bullish or bearish? b. Calculate the MDA today and that of a year ago and calculate the percentage of change in the MDA. Based on this does the market appear to be bullish or bearish? c. Compare your answers to parts (a) and (b) above. Did you reach the same conclusion about the direction of the overall market? What role did the divisor play in terms of the conclusion you reached in part b? a. The price change in Ace Computers is %. (Enter as a percentage and round to one decimal place. Be sure to enter negative answers as negative.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Stock Ace Computers Coburn Motor Company National Soap & Cosmetics Ronto Foods Wings Aircraft Today $65.28 38.25 87.92 65.61 84.64 C 1 Year Ago $62.47 34.69 95.68 72.32 88.73 - X
Imagine that the Mini-Dow Average (MDA) is calculated by adding up the closing prices of five stocks and dividing that sum by a divisor. The divisor used in the calculation of the MDA is currently 0.775. The closing prices for each of the five stocks in the MDA today and exactly 1 year ago, when the divisor was 0.815, are given in the following table: . a. Calculate the percentage change in each stock. Based on this, is your sense that the market is bullish or bearish? b. Calculate the MDA today and that of a year ago and calculate the percentage of change in the MDA. Based on this does the market appear to be bullish or bearish? c. Compare your answers to parts (a) and (b) above. Did you reach the same conclusion about the direction of the overall market? What role did the divisor play in terms of the conclusion you reached in part b? a. The price change in Ace Computers is %. (Enter as a percentage and round to one decimal place. Be sure to enter negative answers as negative.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Stock Ace Computers Coburn Motor Company National Soap & Cosmetics Ronto Foods Wings Aircraft Today $65.28 38.25 87.92 65.61 84.64 C 1 Year Ago $62.47 34.69 95.68 72.32 88.73 - X
Chapter13: Direct Foreign Investment
Section: Chapter Questions
Problem 1IEE
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Transcribed Image Text:Imagine that the Mini-Dow Average (MDA) is calculated by adding up the closing prices of five stocks and dividing that sum by a divisor. The divisor used in the calculation of the MDA is currently
0.775. The closing prices for each of the five stocks in the MDA today and exactly 1 year ago, when the divisor was 0.815, are given in the following table:
a. Calculate the percentage change in each stock. Based on this, is your sense that the market is bullish or bearish?
b. Calculate the MDA today and that of a year ago and calculate the percentage of change in the MDA. Based on this does the market appear to be bullish or bearish?
c. Compare your answers to parts (a) and (b) above. Did you reach the same conclusion about the direction of the overall market? What role did the divisor play in terms of the conclusion you
reached in part b?
a. The price change in Ace Computers is%. (Enter as a percentage and round to one decimal place. Be sure to enter negative answers as negative.)
Data table
(Click on the icon here in order to copy the contents of the data table below into
a spreadsheet.)
Stock
Ace Computers
Coburn Motor Company
National Soap & Cosmetics
Ronto Foods
Wings Aircraft
Today
$65.28
38.25
87.92
65.61
84.64
1 Year Ago
$62.47
34.69
95.68
72.32
88.73
X
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