Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following stocks Stock Initial Price (t-0) Final Price (t-1) Number of shares (in millions) A B 20 80 15 90 12 2 1-

image text in transcribed
image text in transcribed
Consider the following stocks Stock Initial Price (t-0) Final Price (t-1) Number of shares (in millions) A B 20 80 15 90 12 2 1- Calculate the initial price of a price-weighted index that comprises both stocks A and B. 2- Calculate the final price of the same price-weighted index that comprises both stocks A and B. 3. Find the percentage change in the price-weighted average of the two stocks. 4- Calculate the final price of a market value weighted index that comprises A and B (assume that the initial price of the index is 100). Question 1 of 13 5- What is the percentage change of the value-weighted index? % Assume now that at t-0, stock B undergoes a 2 for 1 split (see new table below): Stock Initial Price (t-0) Final Price (t-1) Number of shares (in millions) A 20 40 15 45 12 4 B 6- What is the new divisor for the price-weighted index? Assume now that at t=0, stock B undergoes a 2 for 1 split (see new table below): Stock Initial Price (t-0) Final Price (t-1) Number of shares in millions) 20 15 45 12 4 B 40 6- What is the new divisor for the price weighted index? n 1 of 13 7- Calculate the percentage change in the adjusted price-weighted index after the stock split. % 7. Calculate the percentage change in the value-weighted index after the stock split. %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Production And Operations Analytics

Authors: Steven Nahmias, Tava Lennon Olsen

8th Edition

1478639261, 9781478639268

More Books

Students also viewed these Finance questions

Question

2. What recommendations will you make to the city council?

Answered: 1 week ago