92,976 views
45 votes
45 votes
A moving average of stock prices _________________.A. always lies above the most recent priceB. always lies below the most recent priceC. is less volatile than the actual pricesD. is more volatile than the actual prices

User Jeremy Cowles
by
2.6k points

1 Answer

16 votes
16 votes

Answer:

The correct option is C. is less volatile than the actual prices.

Step-by-step explanation:

A moving average is a data-analysis approach that calculates the averages of distinct subsets of the complete data set. The purpose of determining a stock's moving average is to smooth out price data by creating an average price that is constantly updated.

Therefore, the moving average reduces the impact of random, short-term fluctuations on the price of a stock over a given time frame. This makes the moving average of stock prices be less volatile than the actual prices.

Therefore, the correct option is C. is less volatile than the actual prices.

User Ainwood
by
3.3k points