Finance : Stocks and Trend Lines
Pick your favorite financial site on the web. Go there and get the stock price for Coca Cola for the first trading day in March and April of this year. Develop a trend line slope (change in dollars per month). Check the stock price for the first trading day in May. Was it at, above or below the value that your trend line predicted? Show your work and give us some ideas of why the stock was at the May level. Extend the trend line for another month and check the expected price (from your extended trend line) against the stock price for the first trading day in June. Show your work and give us some ideas of why the stock was at the May and June levels. What do you think about using this kind of trend line to predict stock performance?
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Solution Preview
From the graphs (SEE ATTACHED FILE), it looks like coke was...
March 1..... $49.625 (fractions of pennies are okay on Wall St.)
April 1..... $50.60
May 1....... $50.625
June 1...... $51.10
The trend line from March to April will put the expected May 1 price to be about $51.75. The real price was ...
Solution Summary
Coca Cola stock price and trend-lines are analyzed. The solution is well explained.