Question #4: Price-Weighted Index vs. Value-Weighted Index [20 Points] Suppose that there is a stock market index that tracks the performance of 5 large gambling corporations. This index is called "Gambling Index The 5 stocks in the index are: 1. Caesars Entertainment Corp (Stock Symbol: CZR): Shares Outstanding: 144,210 2. Las Vegas Sands Corp (Stock Symbol: LVS): Shares Outstanding: 814,770 3. MGM Resorts International (Stock Symbol: MGM): Shares Outstanding: 490,610 4. Monarch Casino & Resort (Stock Symbol: MCRI): Shares Outstanding: 16,670 5. Wynn Resorts Ltd (Stock Symbol: WYNN): Shares Outstanding: 100,820 Go to finance.yahoo.com and retrieve the stock price of each of the firms in the Gambling Index for two dates: November 5, 2019 and November 6, 2019. Enter the stock symbol, then click on historical prices, and use the Adj. close price] (a) Compute the daily percentage return of the index between November 5, 2019 and November 6, 2019 using a price-weighted index. The initial price is the adjusted close price from November 5 and the end price is the adjusted close price from November 6. [8 Points] (b) Compute the daily percentage return of the index between November 5, 2019 and November 6, 2019 using a value-weighted index. [12 Points] [Hint: You will need shares outstanding to find the value-weighted index. Use the number of shares outstanding given above.] Question #4: Price-Weighted Index vs. Value-Weighted Index [20 Points] Suppose that there is a stock market index that tracks the performance of 5 large gambling corporations. This index is called "Gambling Index The 5 stocks in the index are: 1. Caesars Entertainment Corp (Stock Symbol: CZR): Shares Outstanding: 144,210 2. Las Vegas Sands Corp (Stock Symbol: LVS): Shares Outstanding: 814,770 3. MGM Resorts International (Stock Symbol: MGM): Shares Outstanding: 490,610 4. Monarch Casino & Resort (Stock Symbol: MCRI): Shares Outstanding: 16,670 5. Wynn Resorts Ltd (Stock Symbol: WYNN): Shares Outstanding: 100,820 Go to finance.yahoo.com and retrieve the stock price of each of the firms in the Gambling Index for two dates: November 5, 2019 and November 6, 2019. Enter the stock symbol, then click on historical prices, and use the Adj. close price] (a) Compute the daily percentage return of the index between November 5, 2019 and November 6, 2019 using a price-weighted index. The initial price is the adjusted close price from November 5 and the end price is the adjusted close price from November 6. [8 Points] (b) Compute the daily percentage return of the index between November 5, 2019 and November 6, 2019 using a value-weighted index. [12 Points] [Hint: You will need shares outstanding to find the value-weighted index. Use the number of shares outstanding given above.]
