Lindsay Kelly bought 100 shares of Google, 300 shares of Microsoft, and 500 shares of Nokia in
Question:
Lindsay Kelly bought 100 shares of Google, 300 shares of Microsoft, and 500 shares of Nokia in January 2005. The adjusted closing prices of these stocks over the next three years are shown in the accompanying table.
a. Compute and interpret the unweighted aggregate price index for Lindsay's portfolio, using 2005 as the base year.
b. Compute and interpret the corresponding weighted price index using the Laspeyres approach.
c. Why are the results from parts a and b so different?
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
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Year 2005 2006 2007 Google 195.62 432.66 505.00 Microsoft 24.11 26.14 28.83 Nokia 13.36 16.54 19.83
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a The unweighted aggregate price index for period t is calculated as where represents the prices in ...View the full answer
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Related Book For
Business Statistics Communicating With Numbers
ISBN: 9780078020551
2nd Edition
Authors: Sanjiv Jaggia, Alison Kelly
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