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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 0.790, are given in the accompanying table.

Calculate the MDA today and that of a year ago.

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?

Stock

Today

1 Year Ago

Ace Computers

$65

$74

Coburn Motor Company

37

34

National Soap & Cosmetics

110

96

Ronto Foods

73

72

Wings Aircraft

96

87

Financial Management, Finance

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