Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a . Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 3 1 ,

a. Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 31,2019.(A In addition to price-weighted and value-weighted indexes, an equally weighted index is one in which the index value is computed from
the average rate of return of the stocks comprising the index. Equally weighted indexes are frequently used by financial researchers to
measure portfolio performance.
The following three defense stocks are to be combined into a stock index in January 2019(perhaps a portfolio manager believes these
stocks are an appropriate benchmark for his or her performance):
a. Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 31,2019.(A
negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
b. If the index value is set to 100 on January 1,2019, what will the index value be on January 1,2020?(Do not round intermediate
calculations. Round your answer to 2 decimal places.)
negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
b. If the index value is set to 100 on January 1,2019, what will the index value be on January 1,2020?(Do not round intermediate
calculations. Round your answer to 2 decimal places.)
Index value
c. What is the rate of return on the index for 2020?(Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
Index roturn
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Reporting And Statement Analysis A Strategic Approach

Authors: Clyde P. Stickney, Paul Brown, James M. Wahlen

5th Edition

032418638X, 978-0324186383

More Books

Students also viewed these Finance questions

Question

Define the purpose of neuropsychological testing.

Answered: 1 week ago