Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The ICAN (Index of Companies with Animal Names) is a price-weighted stock index comprised of the five companies shown below. None of the companies pay

image text in transcribed
The ICAN (Index of Companies with Animal Names) is a price-weighted stock index comprised of the five companies shown below. None of the companies pay dividends. Company Toucan Technologies Manatee Motors Iguana Industries Koala Cola Penguin Pharmaceuticals Share Price on January 1, 2022 $12.40 $68.00 $101.50 $43.33 $310.00 Share Price on January 1, 2023 $14.75 $61.75 $166.25 $50.00 $400.00 The ICAN index on January 1, 2022 was 1784.10. On January 1, 2023, the ICAN index rose to 2309.17. The ICAN rate of return was therefore 29.43% over this period. a) Calculate the ICAN divisor. b) Suppose you purchased 500 shares of Toucan Technology, 400 shares of Manatee Motors, 300 shares on Iguana Industries, 200 shares of Koala Cola, and 100 shares of Penguin Pharmaceuticals. All purchases were made on January 1, 2022. Suppose you then sold all shares on January 1, 2023. What was your portfolio rate of return over this period? c) Does your rate of return equal the ICAN rate of return? Why or why not. Explain carefully

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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Finance questions

Question

What is management growth? What are its factors

Answered: 1 week ago