Question

Using a four-quarter weighted moving average with weights of 0.5 for the most recent quarter and then 0.25 for the next recent quarter and then 0.15 and 0.1 respectively, what would have been the.

Answer 1

To calculate the four-quarter weighted moving average, multiply each data point by its respective weight, sum the products, and divide by the sum of the weights.

Step-by-step explanation:

To calculate the four-quarter weighted moving average, you would multiply each data point by its respective weight and then sum the products. In this case, you would multiply the most recent quarter by 0.5, the next recent quarter by 0.25, the next by 0.15, and the oldest quarter by 0.1. Once you have the weighted sums, you would divide the total by the sum of the weights (0.5 + 0.25 + 0.15 + 0.1 = 1). This would give you the four-quarter weighted moving average.

For example, if the most recent quarter's value is 10, the next recent quarter is 8, the next is 6, and the oldest is 4, the calculation would be: (10 * 0.5) + (8 * 0.25) + (6 * 0.15) + (4 * 0.1) = 5 + 2 + 0.9 + 0.4 = 8.3.

So, based on the given weights and values, the four-quarter weighted moving average would have been 8.3.