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Assume the following stocks make up a value-weighted index: Corp. Shares Outstanding Market Price Alpha 50,000 $30 Beta 5,000 10 Gamma 18,000 15 Delta 10,000
Assume the following stocks make up a value-weighted index: Corp. Shares Outstanding Market Price Alpha 50,000 $30 Beta 5,000 10 Gamma 18,000 15 Delta 10,000 40 a. Compute the total market value and the weights assigned to each stock. Round up to two places to the right of the decimal point. (The weights may add up to slightly more or less than 100 percent due to rounding.) b. Assume the shares of Alpha Corporation go up by 20 percent while the shares of Gamma Corporation go down by 40 percent. The other two stocks remain constant. What will be the newly established value for the index
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