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ck Initial Price Final Price Stock Initial Value of Outstanding Stock ($ million) Shares (million) Final Value of Outstanding Stock ($ million) $ 25 20

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ck Initial Price Final Price Stock Initial Value of Outstanding Stock ($ million) Shares (million) Final Value of Outstanding Stock ($ million) $ 25 20 ABC XYZ Total 100 $30 90 $500 100 $600 $600 90 $690 Suppose the price of XYZ in Table 2.3 increases to $110, while ABC falls to $20. Find the percentage change in the price-weighted average of these two stocks. Compare that to the percentage return of a portfolio holding one share in each company. Reconsider companies XYZ and ABC from Concept Check 2.4. Calculate the percentage change in the market- value-weighted index. Compare that to the rate of return of a portfolio that holds $500 of ABC stock for every $100 of XYZ stock (.e., an index portfolio)

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