11. A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $18, $28, and $60. The number of outstanding shares for each is 760,000 shares, 660,000 shares, and 360,000 shares, respectively. If the stock prices changed to $22, $26, and $62 today respectively, what is the 1-day rate of return on the index?

a. 3.20%

b. 7.17%

c. 5.35%

d. 4.54%

12. Which of the following does not approximate the performance of a buy-and-hold portfolio strategy?

a. An equally weighted index

b. All of these options (Weights are not a factor in this situation.)

c. A value-weighted index

d. A price-weighted index

13. What distinguishes a pure discount bond from a regular bond?

a. A discount bond pays coupons and regular bond does not

b. A discount bond is sold a premium to par value and a regular bond is not

c. A regular bond pays coupons and a discount bond does not

d. None of the above