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X (a) Consider a price-weighted index with only three stocks. If the stock prices are GHS20. GHS30 and GHS40 and the divisor is 3.0, what

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X (a) Consider a price-weighted index with only three stocks. If the stock prices are GHS20. GHS30 and GHS40 and the divisor is 3.0, what is the index level? If the GHS40 stock does a 2-for-1 stock split to GHS20, calculate the new divisor? (b) Find below a market value-weighted index, with only three stocks. Each stock originally sold 100 shares at GHS30. Assuming the base index value is 100, what is the value of the index? What happens when the 80 stock has 2-for-1 stock split? Stock A B Price (GHS) 40 60 80 Shares Outstanding 300 200 100

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