Question

You are given the following information concerning two stocks
that make up an index. What is the **percentage**
value-weighted return for the index?

Shares Outstanding | Beginning of Year Price | End of year Price | |

Kirk, Inc. | 46,000 | $83 | $90 |

Picard Co. | 60,000 | 40 | 52 |

Answer #1

Ending value = [($90 × 46,000) + ($52 × 60,000)] / 2 =
$3,630,000

Return = ($3,630,000-$3,109,000) / $3,109,000 = 16.76%

Note you could also solve the problem as:

Beginning value = ($83 × 46,000) + ($40 × 60,000) =
$6,218,000

Ending value = ($90 × 46,000) + ($52 × 60,000) = $7,260,000

Return = ($7,260,000 – 6,218,000) / $6,218,000 = 16.76%

The interpretation in this case is the percentage increase in the
market value of the market.

You are given the following information concerning two stocks
that make up an index.
Assume that you want to reindex with the index value at the
beginning of the year equal to 100. What is the index level at the
end of the year? (Do not round intermediate calculations.
Round your answer to 2 decimal places.)
Price per Share
Shares Outstanding
Beginning of Year
End of Year
Kirk, Inc.
38,000
$
61
$
67
Picard Co.
27,500
113
119
Index...

5. A price-weighted index has 3 stocks: A, B and C. Their price
at the start of the index was $35, $48 and $90.
What is the initial divisor if the index start with a value of
100?
By the end of the first year, the price of the 3 stocks is $40,
$52 and $83 respectively. How much has the index gone up?
If stock C has a 3-for-1 split, what would be the new index
value after one...

The four stocks below are part of an index. Use the information
below: a. Compute a price-weighted index by adding their prices at
time t and time t 1 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 1. What is the percentage change in the index?
c. Why is there a difference between your answers to (a) and (b)? #
OF SHARES...

"A benchmark index has three stocks priced at $32, $35, and $70.
The number of outstanding shares for each is 350000 shares, 405000
shares, and 553000 shares, respectively. Suppose the price of these
three stocks changed to $30, $40, and $62 and number of outstanding
shares did not change, what is the equal-weighted index
return?"
-3.65%
0.72%
-1.13%
-4.45%
question 18

Consider the following information:
Shares Outstanding
Price per share
Beginning of the year
End of the year
ABC Inc.
20, 000 shares
$15
$20
MMM Inc.
10,000 shares
$70
$80
What is the value-weighted return for the index?
A.
5%
B.
10%
C.
15%
D.
18%
E.
20%

The following information is given about Global Electronic Co.
for the year 2009:
Net Sales $2,000,000
Return on Equity 25%
Debt to Equity ratio 30%
Net profit margin 5%
Number of common stocks outstanding 20,000 shares, Preferred
stocks (5%, $100 par, and 1,000 shares issued) and no change in the
number of common stocks outstanding.
P/B (Market Price to Book value per share) 2.3 times
Percentage of earning retained 40%
Instructions: Find the following: (a) Market Price per Common
Shares....

The Hydro Index is a price weighted stock index based on the 4
largest boat manufacturers in the nation. Consider the four stocks
in the following table. Pt represents price at time t,
and Qt represents shares outstanding at time t. (Please pay close
attention to stock split)
P0
Q0
P1
Q1
P2
Q2
A
80
200
90
200
98
200
B
50
300
40
300
50
300
C
90
200
110
200
115
200
D
100
100
90
100...

onsider the three stocks in the following table.
Pt represents price at time t, and
Qt represents shares outstanding at time
t. Stock C splits two-for-one in the last
period.
P0
Q0
P1
Q1
P2
Q2
A
87
100
92
100
92
100
B
47
200
42
200
42
200
C
94
200
104
200
52
400
a. Calculate the rate of return on a
price-weighted index of the three stocks for the first period
(t = 0 to t...

Considering three stocks in the following table.
Pt represents a price at day t, and
Qt represents the number of shares outstanding at
day t. Stock C splits ten-for-one at the beginning of day 2.
P0
Q0
P1
Q1
P2
Q2
A
81.52
1000
85.32
1000
90.16
1000
B
48.12
2000
45.24
2000
47.52
2000
C
611.23
2000
632.25
2000
60.45
20000
Calculate the rate of return on a price-weighted index of the
three stocks for the first day (...

You are given the following information about the stocks in a
two-stock portfolio
Stock
Return
Portfolio Weight
Standard Deviation
Blue Hotel Inc.
22%
45%
9%
Joys Food Inc.
25%
55%
11%
The correlation coefficient between the two stocks is 0.5.
Using the information above, calculate the following:
The expected return of the portfolio,
The variance of the portfolio,
The standard deviation of the portfolio.

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