Question
Consider: a) price-weighted and then b) market value weighted index consisting of 3 stocks A, B,...
Consider:
a) price-weighted and then
b) market value weighted
index consisting of 3 stocks A, B, and C. The stocks' prices at time 0 (p0) and time 1 (p1) are given below, along with the number of shares outstanding. Calculate the percentage change in index levels from time 0 to time 1.
Round answers to 4 decimal places. Please show work!
| stock | p0 | p1 | outstanding shares |
| A | 40 | 45 | 200 |
| B | 70 | 50 | 500 |
| C | 10 | 12 | 600 |
I think the answers are -0.1083 and -0.1592 but I cannot remember how i got them.
Homework Answers
Answer #1
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