Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Utilize the spreadsheet that is Problemset1.xlsx. On it you will find the value of the Dow Jones Industrial Average (DJIA) at previous day market close

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Utilize the spreadsheet that is Problemset1.xlsx. On it you will find the value of the Dow Jones Industrial Average (DJIA) at previous day market close and market close on August 23, 2022. In addition, you will find the value of each stock in the Dow 30 . a. (10 pts) Utilizing the Open price for each equity calculate the implied denominator for the current index (You don't need to show every calculation but write down any intermediate steps) b. (10 pts) Suppose that at the beginning of the day DIS decides to do a 2 for 1 stock split and GS does a 3 for 1 stock split. What will the new weighting denominator be for the DJIA? c. (10 pts) Suppose that the returns for the two firms in part (b) are consistent in percentage terms after the splits for the day. What will the Close DJIA be after the splits? How does the return on the average differ? If it does why

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

Earnings Quality

Authors: Andrew P.C.

1st Edition

1521507724, 978-1521507728

More Books

Students also viewed these Finance questions

Question

=+3. What power does a shareholder with a blocking minority have?

Answered: 1 week ago

Question

Design a training session to maximize learning. page 296

Answered: 1 week ago

Question

Design a cross-cultural preparation program. page 300

Answered: 1 week ago