Question
At market close on Jan 1st, stock A had 100M shares outstanding and traded at $90 a share. On the following day, the stock closed
At market close on Jan 1st, stock A had 100M shares outstanding and traded at $90 a share. On the following day, the stock closed at $95. Stock B had 200M shares outstanding and its share price dropped from $50 on Jan 1st to $45 on Jan 2nd. Stock C had the same number of shares as stock B and its stock rose from $100 a share to $110 on that same day.
a. What is the Jan 2nd return on a price-weighted index comprised of these 3 stocks?
b. What is the Jan 2nd return on a value-weighted index of the 3 stocks?
c. What is the Jan 2nd return on an equal-weighted index of the 3 stocks?
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