The four stocks listed in the text are part of an index. Using the prior information, a.

Question:

The four stocks listed in the text are part of an index.

Using the prior information,

a. Compute a price-weighted index by adding the stocks' prices at time t and time t + 1. What is the percentage change in the index?

b. Compute a value-weighted index by adding their market values at time t and time t+1 What is the percentage change in the index?

c. Why is there a difference between your answers to Parts a and b?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...