Price-Weighted Indexes Suppose the following three defense stocks are to be combined into a stock index in

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Price-Weighted Indexes Suppose the following three defense stocks are to be combined into a stock index in January 1998 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance).

a. Calculate the initial value of the index if a price-weighting scheme is used.

b. What is the rate of return on this index for the year ending December 31, 1998? For the year ending December 31, 1999?

c. What is the total return on this index over the two-year period 1998 and 1999?

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Fundamentals Of Investments

ISBN: 9780072829198

3rd Edition

Authors: Charles J. Corrado

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Question Posted: May 30, 2024 02:00 AM

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Price-Weighted Indexes Suppose the following three defense stocks are to be combined into a stock index in

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Shares 1/1/98 1/1/99 1/1/00 (mil.) Price Price Price Douglas McDonnell 150 60 75 Dynamics General 750 20 25 International Rockwell 300 40 35 4333 60 40 35

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Fundamentals Of Investments

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