The price-weighted index increases from 62.50[ (100 25)/2] to 65[ (110 20)/2], a gain of 4%. An

Question:

The price-weighted index increases from 62.50[ (100 25)/2] to 65[ (110 20)/2], a gain of 4%. An investment of one share in each company requires an outlay of $125 that would increase in value to $130, for a return of 4% ( 5/125), which equals the return to the price-weighted index. LO.1

Fantastic news! We've Found the answer you've been seeking!