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The following chart shows the prices for five companies on Jan 1 s t of 2 0 2 2 , 2 0 2 3 and
The following chart shows the prices for five companies on Jan of and :
a Suppose that on Jan the K stock index consists of four companies:
Labrador Limited, Malamute Manufacturing, Collie Corporation and Akita
Automotive. Further, suppose the K index is price weighted, and that the Jan
divisor is Calculate the K index on Jan
b Now suppose that, on Jan Akita Automobile was removed from the index,
and Dalmatian Designs was added to the index. Calculate the new divisor.
c Now after the replacement in part b calculate the value of the K index in
d What was the rate of return on the K index for before the replacement from
Jan to Jan
e What was the rate of return on the index for after the replacement from
Jan to Jan
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