Question
Question 7: Consider the following P represents price of stock at time t and Q represents shares outstanding at time t. PO QO P1
Question 7: Consider the following P represents price of stock at time t and Q represents shares outstanding at time t. PO QO P1 Q1 P2 Q2 Stock A $80 400 $90 400 $85 400 Stock B $60 300 $55 300 $55 300 Stock C $90 200 $100 200 $50 400 a. Calculate the rate of return for a Price Weighed Index on day t = 0 to t = 1 b. What happens to the divisor on day 2 c. Calculate rate of return for Price weighted index on day t 1 tot 2 d. Calculate rate of return for first period for Value Weighted Index on day t=0 tot 1 e. Calculate rate of return for first period for Equally Weighted Index on day t=0 tot 1 Assume $50,000 investment in each stock r construction of indexes..
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