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Not sure how to do this, studying for a test. I can post the third question separately if need be. Will upvote answers. A $30
Not sure how to do this, studying for a test. I can post the third question separately if need be. Will upvote answers.
A $30 Consider four stocks with prices and number of shares outstanding in the following table. Stock # Shares Outstanding # Shares Outstanding Price at t=0 Price at t=1 at t=0 at t=1 350 350 $25 B 300 600 $40 $16 C 400 400 $20 $15 D 500 $15 $22 1) Consider a price-weighted index with stocks A and B. What's its return from time to time 1? What happens to its divisor? 2) Consider a market-value weighted index with stocks A, B, and C. What's its return from time to time 1? What happens to its divisor? 3) Consider a market-value weighted index with stocks A, B, and C. Stock Dreplaces stock C at t=1. What's its return from time 0 to time 1? What happens to its divisor? 500 A $30 Consider four stocks with prices and number of shares outstanding in the following table. Stock # Shares Outstanding # Shares Outstanding Price at t=0 Price at t=1 at t=0 at t=1 350 350 $25 B 300 600 $40 $16 C 400 400 $20 $15 D 500 $15 $22 1) Consider a price-weighted index with stocks A and B. What's its return from time to time 1? What happens to its divisor? 2) Consider a market-value weighted index with stocks A, B, and C. What's its return from time to time 1? What happens to its divisor? 3) Consider a market-value weighted index with stocks A, B, and C. Stock Dreplaces stock C at t=1. What's its return from time 0 to time 1? What happens to its divisor? 500Step by Step Solution
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