The price-weighted index

The value-weighted index

What would happen to the value-weighted index if stock ?Y? is split 2 for 1? (1) Stock Price X Y Z 50 80 30 Shares Outstanding 300 800 1000 Given the above table, calculate (a) The price-weighted index (b) The value-weighted index (c) What would happen to the value-weighted index if stock \"Y\" is split 2 for 1? (2) Suppose that a stock is trading at 50 and you want to buy it when the price becomes 55, what order type should you submit? And at what price level ( or range)? (3) What is the main difference between NYSE and NASDAQ markets? (4) Given the following table of a probability distribution of two stocks rate of return, which stock you are going to pick? why? Probability 0.1 0.2 0.4 0.2 0.1 Stock A Return - 10% 2% 12% 20% 38% Stock B Return -35% 0 20% 25% 45% Stock Price (5) Look at the following diagram and explain whether the market is efficient or not, and what form of efficiency relates to the diagram? Time relative to an announcement (6) Define the beta of a stock and explain how would someone estimate a beta of a stock? (7) (a) What are the three asset pricing models you covered in the course. (b) What is the main difference among them , and (c) which one is the most commonly employed by portfolio managers and why? (8) As an investment analysts, your own calculations brought up the following Stock A B C Po 0.68 0.54 0.65 E(P1) 0.75 0.62 0.82 Beta 1.2 1.4 1.6 E(Rm) Rf Rate 12.5% 2.5% considering a full validity of the CAPM, you need to specify whether the three stocks should be bought or sold? Why? (9) Calculate the Beta of stock A from the following data Period 1 Period 2 Market Return 9% 15% Stock \"A\" Return 4% 16% Stock \"B\" Return 12% 19% (10) Suppose that the he nominal interest rate on the treasury bills for year 2015 was 3.5% ; the nominal interest rate on the treasury bonds for year 2015 was 4.75% ; the nominal rate of return on the stock market for the year 2015 was 8.75% ; the calculated consumer price index of December 31, 2014 was 165 while it was 169 at December 31, 2015 ; what would be the real rate of return for the treasury bills? (11) You bought 100 stocks of Turki Co. (yes, that's me) on a 50% margin at $42 a stock. Assume that the broker charged you 8 % interest rate as well as commissions of 4.5% on both the purchase and the sale. If at year end, you received a $1.50 per share dividend and sold the stock for $53, what is your rate of return on this attractive investment? (12) Assume that the stock X return is 9% while that of the market is 6%. Given that the stock's beta is 1.2, what would be the abnormal rate of return of stock X, according to the CAPM framework? (13) Assume that you hold a diversified portfolio and you believe that the market is going to go up in the next period, what would be your investment strategy in terms of reshuffling your asset allocation to stocks given their betas