Question: Imagine that the Mini-Dow Average (MDA) is based on the closing prices of 5 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 5 stocks. The divisor used in the calculation of the MDA is currently 0.765. The closing prices for each of the 5 stocks in the MDA today and exactly 1 year ago, when the divisor was 0.780, are given in the following 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 bear market?

Stock Today 1 Year Ago Ace Computers 74.14 65.26 Coburn Motor Company 38.71 34.73 National Soap & Cosmetics 110.17 94.48 Ronto Foods 73.66 71.09 Wings Aircraft 96.07 86.13

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