Question

In: Finance

The following three defense stocks are to be combined into a stock index in January 2016...

  1. The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance):

    Price
    Shares
    (millions)    		 1/1/16 1/1/17 1/1/18
    Douglas McDonnell 180 $ 60 $ 64 $ 77
    Dynamics General 325 68 64 78
    International Rockwell 370 97 86 100

    a. Calculate the initial value of the index if a price-weighting scheme is used. (Enter your answers rounded to 2 decimal places.)

    Index Value:

    b. What is the rate of return on this index for the year ending December 31, 2016? For the year ending December 31, 2017? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

    2016 Return: %

    2017 Return: %

Solutions

Expert Solution

jeff jeffy answered 4 months ago
Next > < Previous

Related Solutions

The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 350 $ 65 $ 69 $ 81...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 200 $ 70 $ 73 $ 87...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 350 $ 65 $ 69 $ 81...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 215 $ 64 $ 68 $ 82...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 345 $ 94 $ 97 $ 109 Dynamics General 450 66 61 75 International Rockwell 310 95 84 101 a. Calculate the initial value of the index if a price-weighting scheme is used. b. What is the rate of return...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 530 $ 62 $ 66 $ 81...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 340 $ 103 $ 106 $ 118...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 215 $ 64 $ 68 $ 82 Dynamics General 455 72 64 78 International Rockwell 250 101 90 106 a. Calculate the initial value of the index if a price-weighting scheme is used. b. What is the rate of return...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 540 $ 62 $ 66 $ 81 Dynamics General 455 49 43 57 International Rockwell 290 78 67 81 a. Calculate the initial value of the index if a price-weighting scheme is used. Index value:    b. What is the...
The following three defense stocks are to be combined into a stock index in January 2016...
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/16 1/1/17 1/1/18 Douglas McDonnell 360 $ 65 $ 69 $ 83...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT