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38. Global Stock Index is a value weighted index with just 2 stocks in the index: ABC stock and XYZ stock. (a) ABC ended 2005
38. Global Stock Index is a value weighted index with just 2 stocks in the index: ABC stock and XYZ stock. (a) ABC ended 2005 at a price of $55 and had 1 million shares outstanding. XyZ stock ended 2005 at a price of $32 and had 4 million shares outstanding. ABC ended 2006 at a price of $58. XYZ stock closed at $35 for 2006. If the base value of Global Stock Index in 2005 was 100, what was its value in 2006 if the index is value-weighted? (b).Consider the information in part (a) for the Global Stock Index, and assume that the index is a price-weighted one instead. Calculate the index's rate of return (% change in value during 2006) in this case
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