Question

An index consists of 3 stocks: A, B and C. At date 0, the prices per share for A, B and C are $13, $60, and $15, respectively. At date 0, B has a stock split where one stock splits into 3 and the price per share is reduced to $20. At date 1, the prices per share for A, B and C are $12, $22, and $12, respectively. A price weighted index consists of these 3 stocks. What is the value of that index at time 1?

For your convenience, the prices of the 3 stocks are provided in the following table:

Stock	P0 (price at time 0 immediately before the split)	P0_split (price at time 0 immediately after the split)	P1(price at time 1)
A	13	13	12
B	60	20	22
C	15	15	12

		26.78
		32.14
		28.05
		24.32

Answer 1