The market consists of the following stocks. Their prices and number of shares are as follows:

Stock Price Number of Shares Outstanding

A $10 100,000

B 20 10,000

C 30 200,000

D 40 50,000

(a) What is the aggregate market value if a S&P 500 type of measure of the market (value-weighted average) is used?

b. The price of Stock C doubles to $60. What is the percentage increase in the market if a S&P 500 type of measure of the market (value-weighted average) is used?

c. Repeat question (b) but use a Value Line type of measure of the market (i.e., a geometric average) to determine the percentage increase.

d. Suppose the price of stock B doubled instead of stock C. How would the market have fared using the aggregate measures employed in (b) and (c)? Why are your answers different?