Question: Imagine that the Mini-Dow Average (MDA) is based on the closing prices of five stocks. The divisor used in the calculation of the MDA is

Imagine that the Mini-Dow Average (MDA) is based on the closing prices of five stocks. The divisor used in the calculation of the MDA is currently 0.765. The closing prices for each of the five stocks in the MDA today and exactly one year ago, when the divisor was 0.780, are given in the accompanying table.

a. Calculate the MDA today and that of a year ago.

b. Compare the values of the MDA calculated in part a and describe the apparent market behavior over the last year. Was it a bull or a bear market?

1 Year Ago Stock Today $ 74 Ace Computers .... $65 Coburn Motor Company $ 39 $34 ... .... .... National Soap & Cosmetics

1 Year Ago Stock Today $ 74 Ace Computers .... $65 Coburn Motor Company $ 39 $34 ... .... .... National Soap & Cosmetics ... $112 $95 $ 71 Ronto Foods $72 $ 97 $88 Wings Aircraft

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a b The value of the MDA today is 5988 points ... View full answer

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