Question

Use the following information to answer the next two questions. Price Shares (millions) 1/1/13 1/1/14 1/1/15...

Use the following information to answer the next two questions.

Price
Shares
(millions)		 1/1/13 1/1/14 1/1/15
  Douglas McDonnell 200    $ 70    $ 73    $ 87   
  Dynamics General 300    51    46    60   
  International Rockwell 390    80    69    86   

Find the rate of return for an equally weighted index from 2014-2015.

.2394

.2464

.2475

.2671

Find the percentage return on a value weighted index from 2013-2014.

-.0647

-.0858

-.0411

None of the above
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Answer #1

Answer 1

3rd Option

0.2475

A B C=B-A C/A
01-01-14 01-01-15
Douglas McDonnell 73 87 14 19.17808
Dynamics General 46 60 14 30.43478
International Rockwell 69 86 17 24.63768
74.25055
24.75018
0.7425/3 = 0.2475

Answer 2

2nd Option

-.0858
A B C A*B A*C
Shares 01-01-13 01-01-14
Douglas McDonnell 200 70 73 14000 14600
Dynamics General 300 51 46 15300 13800
International Rockwell 390 80 69 31200 26910
60500 55310
-.0858
(A*C-A*B)/(A*B)
0 0
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