In: Finance
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
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.
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