10) Consider a stock index consisting of the following three stocks:

Price at the beginning of the year Number of shares Outstanding

Stock X- $50 100

Stock Y- $40 125

Stock Z- $25 200

Stock Z-

You dont have end-of-year price information. How does the equal-weighted index return during the year (from start to end) compare to the price-weighted index return?

1. A) The equal-weighted return equals the price-weighted return

2. B) The equal-weighted return is greater than the price-weighted return

3. C) The equal-weighted return is less than the price-weighted return

4. D) Cannot determine without more information