Question

The table below shows the closing monthly stock prices for IBM and Amazon. Calculate the exponential three-month moving average for both stocks where two-thirds of the average weight is placed on the most recent price. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	IBM				AMZN
January	$	170.84		$	603.26
February		174.09			615.56
March		182.65			583.94
April		198.47			544.90
May		195.73			524.86
June		205.41			503.98
July		225.18			604.29
August		212.77			540.06
September		217.19			514.52
October		213.75			594.66
November		193.19			597.65
December		173.66			648.10

	IBM	AMZN
March
April
May
June
July
August
September
October
November
December

Answer 1

Let EMA for period t be EMA_t and actual price be P_t

Hence, EMA_t = P_t * k + EMA_t-1 * (1−k)

where, k = 2/3

For the first period, EMA_t = P_t

Calculating using the above formula -

	IBM	EMA
January	170.84	170.84
February	174.09	173.0067
March	182.65	179.4356
April	198.47	192.1252
May	195.73	194.5284
June	205.41	201.7828
July	225.18	217.3809
August	212.77	214.307
September	217.19	216.229
October	213.75	214.5763
November	193.19	200.3188
December	173.66	182.5463

	AMZN	EMA
January	603.26	603.26
February	615.56	611.46
March	583.94	593.1133
April	544.9	560.9711
May	524.86	536.897
June	503.98	514.9523
July	604.29	574.5108
August	540.06	551.5436
September	514.52	526.8612
October	594.66	572.0604
November	597.65	589.1201
December	648.1	628.44