Question

Boran Stockbrokers, Inc., selects four stocks for the purpose of developing its own index of stock market behavior. Prices per share for a year 1 base period, January year 3, and March year 3 follow. Base-year quantities are set on the basis of historical volumes for the four stocks.

Stock	Industry	Year 1 Quantity	Price per Share ($)
			Year 1 Base	January Year 3	March Year 3
A	Oil	100	29.50	22.75	22.50
B	Computer	150	65.00	49.00	47.50
C	Steel	75	40.00	31.00	29.50
D	Real Estate	50	16.00	6.50	2.75

Part 1:

Compute the price relatives for the four stocks making up the Boran index. (Round your answers to one decimal place.)

Stock	Price Relative
	January	March
A
B
C
D

Part 2:

Use the weighted average of price relatives to compute the January year 3 and March year 3 Boran indexes. (Round your answers to one decimal place.)

I_Jan=

I_Mar=

Answer 1

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