Question
Consider a stock index consisting of the following three stocks: Stock Price at the beginning of the year Number of shares outstanding X $50 100
Consider a stock index consisting of the following three stocks: Stock Price at the beginning of the year Number of shares outstanding X $50 100 Y $40 125 Z $25 200 You dont have end-of-year price information. How does the equal-weighted index return during the year (from start to end) compare to the value-weighted index return? A) The equal-weighted return equals the value-weighted return B) The equal-weighted return is greater than the value-weighted return C) The equal-weighted return is less than the value-weighted return D) Cannot determine without more information
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