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Question 4 (1 point) DDR Inc. and FFD Inc. are both part of a market capitalization weighted stock index. DDR, trading at $40 a share,
Question 4 (1 point) DDR Inc. and FFD Inc. are both part of a market capitalization weighted stock index. DDR, trading at $40 a share, has a market capitalization of $240 million while FFD trading at $20 a share has a market capitalization of $1.4 trillion. At the end of the trading day. FFD shares have gone up by $1. while DDR shares have gone down in price by $1. If you assume that all other stocks in the index didn't move that day, where will the index close? a) The index will close at the same level as the day before as the two securities will cancel each other out. b) The index will close down from the day before because DDR has a higher per share price than FFD. c) The index will close up from the day before as FFD has a higher market capitalization d) The index will close down from the day before as DDR has a lower market capitalization Previous Page Next Page Page 4 of 12
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