Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are given the following information for three stocks: Stock Price on 1/1/2021 Price on 12/31/2021 Shares (million) A $20 $25 15 B $35 $15

image text in transcribed

You are given the following information for three stocks: Stock Price on 1/1/2021 Price on 12/31/2021 Shares (million) A $20 $25 15 B $35 $15 30 $90 $150 1 A) (10 points) Construct a price-weighted index value for the three stocks on 1/1 and 12/31. What was the rate of return based on these numbers? B) (10 points) Suppose now that stock C had a 1:2 reverse stock split during 2021 and the price on 12/31/2021 was $300? Recalculate the price-weighted index for 12/31/2021. What is the divisor? (A 1:2 reverse stock split means that every 2 shares you own become 1 share) Ignore the stock split for questions C and D. C) (10 points) What is the return on a value-weighted portfolio for 2021? D) (10 points) What is the return on an equal-weighted portfolio for 2021? You are given the following information for three stocks: Stock Price on 1/1/2021 Price on 12/31/2021 Shares (million) A $20 $25 15 B $35 $15 30 $90 $150 1 A) (10 points) Construct a price-weighted index value for the three stocks on 1/1 and 12/31. What was the rate of return based on these numbers? B) (10 points) Suppose now that stock C had a 1:2 reverse stock split during 2021 and the price on 12/31/2021 was $300? Recalculate the price-weighted index for 12/31/2021. What is the divisor? (A 1:2 reverse stock split means that every 2 shares you own become 1 share) Ignore the stock split for questions C and D. C) (10 points) What is the return on a value-weighted portfolio for 2021? D) (10 points) What is the return on an equal-weighted portfolio for 2021

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

Dividend Policy On Share Price Volatility In Indian Stock Market

Authors: Vijay Deswal

1st Edition

3841859623, 978-3841859624

More Books

Students also viewed these Finance questions

Question

Explain the various collection policies in receivables management.

Answered: 1 week ago

Question

What are the main objectives of Inventory ?

Answered: 1 week ago

Question

Explain the various inventory management techniques in detail.

Answered: 1 week ago

Question

1. Explain the difference between debt finance and equity finance.

Answered: 1 week ago