QUESTION 12

Value-weighted indices are biased toward high book value stocks.

True

False

5 points

QUESTION 13

A price-weighted index consists of stocks X, Y, and Z which are priced at $50, $90, and $80 per share, respectively. The current index divisor is 3.2. What will the new index divisor be if stock Z undergoes a 1:2 stock split? Round intermediate steps to four decimals.

		4.3636
		2.6182
		2.5455
		4.5091