Question 2

Stock	Number of Shares	Price of T	P rice (T+1)
KPLC COMP	8,000,000	50	70
Standard charted	20,000,000	30	35
Madison LTD	40,000,000	20	25

1. Construct a price-weighted index for these three stocks, and compute the percentage change in the series for the period from T to T +1
2. Construct a market-value-weighted index for these three stocks, and compute the percentage change in the series for the period from T to T+1
3. Briefly discuss the difference in the results for the two stock indexes
4. Discuss the three common mistakes that can bias the results against the Efficient Market Hypothesis