Question

In: Finance

Three stocks have share prices of $21, $75, and $45 with total market values of $460...

Three stocks have share prices of $21, $75, and $45 with total market values of $460 million, $410 million, and $210 million, respectively. If you were to construct a price-weighted index of the three stocks, what would be the index value?

rev: 02_11_2013_QC_26234

60

47

360

75

Solutions

Expert Solution

Price weighted index is calculated using the below formula:

Price weighted index= Sum of prices/ Number of stocks

                                         = $21 + $75 + $45/ 3

                                         = $141/3

                                         = $47.

Hence, the answer is option b.

In case of any query, kindly comment on the solution.

jeff jeffy answered 10 months ago
Next > < Previous

Related Solutions

1. Three stocks have share prices of $12 (A), $75 (B), and $30 (C) with total...
1. Three stocks have share prices of $12 (A), $75 (B), and $30 (C) with total market values of $400 million, $350 million, and $150 million, respectively. If you were to construct a price-weighted index of the three stocks, what would be the index value? If one year late the stock price of A (+10%), B (+6%) and C (-8%), what would be the new value and return of this index? Show all calculations. 2. Use the information of the...
1. We have a market capitalization weighted index of 20 stocks. The total market capitalization of...
1. We have a market capitalization weighted index of 20 stocks. The total market capitalization of the index is $1 billion. Today, 18 of the stocks finished unchanged – that is, their return was 0.0%. The 19th stock was up 1% and has a market capitalization of $100 million. The 20th stock was down 1% and has a market capitalization of $10 million. What was the change in the index?
(ii) The market consists of the following stocks. Their prices and number of shares are as...
(ii) The market consists of the following stocks. Their prices and number of shares are as follows:     Stock Price Number of Shares Outstanding       A $10 100,000       B 20 10,000       C 30 200,000       D 40 50,000 a. What is the aggregate market value if a S&P 500 type of measure of the market (value-weighted average) is used? b. The price of Stock C doubles to $60. What is the percentage increase in the market if a S&P 500 type of measure...
(ii) The market consists of the following stocks. Their prices and number of shares are as...
(ii) The market consists of the following stocks. Their prices and number of shares are as follows: Stock Price Number of Shares Outstanding A $10 100,000 B 20 10,000 C 30 200,000 D 40 50,000 (a) What is the percentage increase in the market if a S&P 500 type of measure of the market (value-weighted average) is used? b. The price of Stock C doubles to $60. What is the percentage increase in the market if a S&P 500 type...
The share prices of two different stocks are given in the following table: Stock A 234...
The share prices of two different stocks are given in the following table: Stock A 234 245 278 345 378 230 210 423 Stock B 1090 1200 1345 1256 1640 1456 1347 1120 1. Find the correlation coefficient between stock A and stock B 2. Also find coefficient of variation for each stock and from that , conclude which one is more stable.
There are three stocks in the market: A, B, and C. The market betas for the...
There are three stocks in the market: A, B, and C. The market betas for the three stocks are Beta(A) = 0.5, Beta(B) = 1.0, Beta(C) =1.5. The expected returns of the three stocks are E[R(A)] = 8%, E[R(B)] = 12%, and E[R(C)] = 17%. Based on these values, is there any violation of CAPM? Please show work.
There are three stocks in the market: A, B, and C. The market betas for the...
There are three stocks in the market: A, B, and C. The market betas for the three stocks are Beta(A) = 0.5, Beta(B) = 1.0, Beta(C) =1.5. The expected returns of the three stocks are E[R(A)] = 8%, E[R(B)] = 12%, and E[R(C)] = 17%. Based on these values, is there any violation of CAPM (i.e., are the betas and expected returns consistent with CAPM?)
You are considering an investment in the stock market and have identified three potential stocks, they...
You are considering an investment in the stock market and have identified three potential stocks, they are Crown (ASX: CWN), Tencent (HKG: 0700) and Commonwealth Bank (ASX: CBA). The historical prices for the past 10 years are shown in the table below. Assume no dividend is distributed during this period. Year Crown Tencent Commonwealth (CBA) 2010 7.76 29.04 53.63 2011 8.57 40.40 52.15 2012 8.09 37.94 50.39 2013 11.59 54.28 64.10 2014 16.68 108.70 73.83 2015 13.61 132 88.85 2016...
Consider an industry with 21 producers that has the following market share:
  Consider an industry with 21 producers that has the following market share: one producer: 18% two producers: 12% each six producers: 5% each eight producers: 3% each four producers: 1% each The second and third largest producers are wanting to merge. Calculate the four-firm concentration ratio and the Herfindahl-Hirshman Index for this industry, both before and after the proposed merger.
11. A benchmark market value index is comprised of three stocks. Yesterday the three stocks were...
11. A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $18, $28, and $60. The number of outstanding shares for each is 760,000 shares, 660,000 shares, and 360,000 shares, respectively. If the stock prices changed to $22, $26, and $62 today respectively, what is the 1-day rate of return on the index? a. ​3.20% b. ​7.17% c. ​5.35% d. ​4.54% 12. Which of the following does not approximate the performance of a...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT