Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Greenland Stock market consists of two companies. One is a mall-cap copmany with 100 shares outstanding and a market price of 500 per share.

image text in transcribed

The Greenland Stock market consists of two companies. One is a mall-cap copmany with 100 shares outstanding and a market price of 500 per share. The other one is a large-cap company with 10 million hares outstanding at a market price of $5 per share. If the price of the arge-cap company increases to $9 per share, and the price of the mall-cap stock does not change: The value-weighted stock index will show a significant increase The price-weighted stock index will show a significant increase Both the price-weighted and the value-weighted index will increase the same amount There will be no change in either index

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Empirical Techniques In Finance

Authors: Ramaprasad Bhar, Shigeyuki Hamori

1st Edition

3642064175, 978-3642064173

More Books

Students also viewed these Finance questions