17. Consider three stocks, X, Y, and Z, with the following closing prices on two particular dates:

On date 1 there are 100 shares of stock X, 200 shares of stock Y, and 100 shares of stock Zoutstanding.

a. Construct a price-weighted market index using the three stocks, X, Y, and Z What is the index's value on date 1?

b. What is the price-weighted index's value on date 2?

c. Assume that, on date 2, stock Xsplits 4-for-1.What is the price-weighted index's value on that date?

d. Construct a value-weighted index using the three stocks. Assign the valueweighted index a value of 100 on date 1. What is the index's value on date 2?

Transcribed Image Text:

Stock Date I Date 2 x $16 $22 Y 5 Z 24 30