Assume there are only two stocks traded in the stock market, and you are trying to construct an index to show what has happened to stock prices. Let us say that in the base year the prices were $20 per share for stock 1 with 100 million shares outstanding and $10 for stock 2 with 50 million shares outstanding. A year later, the prices are $30 per share for stock 1 and $2 per share for stock 2. Using the approaches of market-weighted and simple- averaged to construct two types of stock indexes showing what has happened to the overall stock market, respectively. Which of the two methods do you prefer and why? (Referred to APPENDIX of Chapter 2 in textbook). Assume there are only two stocks traded in the stock market, and you are trying to construct an index to show what has happened to stock prices. Let us say that in the base year the prices were $20 per share for stock 1 with 100 million shares outstanding and $10 for stock 2 with 50 million shares outstanding. A year later, the prices are $30 per share for stock 1 and $2 per share for stock 2. Using the approaches of market-weighted and simple- averaged to construct two types of stock indexes showing what has happened to the overall stock market, respectively. Which of the two methods do you prefer and why? (Referred to APPENDIX of Chapter 2 in textbook)