Answered step by step
Verified Expert Solution
Question
1 Approved Answer
18. Examine the two methods for determining the index returns for these three stocks. | HPR A 20.00 15.00 Price Weighed Index 56.67 51.94 15-Feb
18. Examine the two methods for determining the index returns for these three stocks. | HPR A 20.00 15.00 Price Weighed Index 56.67 51.94 15-Feb 16-Feb $ B 50.00 40.00 100.00 55.00 -8.33% Value Weighted Index 100.00 HPR 15-Feb _$ 180,000.00 $ 50,000.00 $ 10,000.00 Shares 9000 1000 100 Value $ 240,000.00 -22.50% 16-Feb _$ 135,000.00 $ 40,000.00 $ 11,000.00 $ 186,000.00 77.50 Shares 9000 1000 200 *Consider that Stock C had a 2/1 stock split after the market close on 2/15. a. In a short sentence or paragraph, explain precisely why the returns for these indexes are so different. What, specifically, drove the difference? b. What is the implication of these potential differences for measuring portfolio manager performance? 18. Examine the two methods for determining the index returns for these three stocks. | HPR A 20.00 15.00 Price Weighed Index 56.67 51.94 15-Feb 16-Feb $ B 50.00 40.00 100.00 55.00 -8.33% Value Weighted Index 100.00 HPR 15-Feb _$ 180,000.00 $ 50,000.00 $ 10,000.00 Shares 9000 1000 100 Value $ 240,000.00 -22.50% 16-Feb _$ 135,000.00 $ 40,000.00 $ 11,000.00 $ 186,000.00 77.50 Shares 9000 1000 200 *Consider that Stock C had a 2/1 stock split after the market close on 2/15. a. In a short sentence or paragraph, explain precisely why the returns for these indexes are so different. What, specifically, drove the difference? b. What is the implication of these potential differences for measuring portfolio manager performance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started