You've collected the following information for three stocks. All information refers to the end of a year.

	Shares (million)	Price
Stock	2021	2022	2021	2022
A	85	85	140	115
B	146	438	93	24
C	300	300	46	54

A stock index had value of 7,045 at the end of 2021. Stock B underwent a 3-for-1 stock split at the end of 2021, just after the index was calculated.

Attempt 1/3 for 10 pts.

Part1

What is the new divisor for a price weighted index?

Correct

After the stock split, the price of stock B went down:

P1B,0=PB,0R=933=31,01=,0=933=31

The divisor must adjust so that the index level stays unaffected:

PA,0+P1B,0+PC,0d1=I0,0+,01+,01=0

d1=PA,0+P1B,0+PC,0I0=140+31+467,045=1=,0+,01+,00=140+31+467,045= 0.0308

Attempt 1/3 for 10 pts.

Part2

What is the index value for a price-weighted index at the end of 2022?

Correct

	Shares (million)	Price
Stock	2021	2022	2021	2022
A	85	85	140	115
B	146	438	93	24
C	300	300	46	54
Total			279	193

New index level:

I1=iPi,1d1=1930.0308=1=,11=1930.0308= 6,266

Attempt 2/3 for 10 pts.

Part3

What is the relative change in the price-weighted index? Enter your answer as a decimal number or with the percentage sign.

Correct

Relative change =6,2667,0457,045=11.06%==6,266-7,0457,045=-11.06%= -0.1106

Attempt 2/3 for 10 pts.

Part4

What is the index value for a market value-weighted indexat the end of 2022?