A market value weighted index has three stocks in it, call them A, B, and C. priced at 53, 83, and 69 per share. Each firm has 404, 282 and 458 thousand shares outstanding, respectively. The value of the index at that time is 804. Over the course of the next quarter, the prices of the three stocks change to 99, 62, 38, respectively. What is the new value of the index? Enter answer accurate to two decimal places.

A market value weighted index has three stocks in it, call them A, B, and C. priced at 53, 83, and 69 per share. Each firm has 404, 282 and 458 thousand shares outstanding, respectively. The value of the index at that time is 804. Over the course of the next quarter, the prices of the three stocks change to 99, 62, 38, respectively. What is the new value of the index? Enter answer accurate to two decimal places.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $12, $19, and $56. The number of outstanding shares for each is 619,000 shares, 472,000 shares, and 192,000 shares, respectively. If the stock prices changed to $18, $30, and $68 today respectively, what is the one day rate of return on the index? Multiple Cholce 33.64% 41.29% 28.13% 23.73%
There are three stocks in a price-weighted index: A $100 B $20 C $60 a. What is the average value for the index? b. Assume stock A goes down by 25 percent and stock B goes up by 25 percent, and stock C remains the same. What is the new average value for the index? c. Explain why in part b the average changed with two stocks moving up and down by the same percentage amount.
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period. P0 Q0 P1 Q1 P2 Q2 A 110 500 115 500 115 500 B 90 600 85 600 85 600 C 80 600 100 600 50 1,200 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Calculate the new divisor for the price-weighted index in year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Calculate the rate of return for the second period (t = 1 to t = 2).
Consider the three stocks in the following table. Pt represents price at time t, Qt represents shares outstanding at time t. Stock C splits two for one in the second period from t=1 to t=2. Calculate the rate of return on a price-weighted index consisting of the three stocks for the first period from t=0 to t=1. Answer in percentage. Stock P0 Q0 P1 Q1 P2 Q2 A 70 475 75 475 75 475 B 45 850 40 850 40 850 C 50 300 60 300 30 600 a. 0.00% b. 2.49% c. 6.06% d. 8.95% e. 1.30%
You are given the following information concerning two stocks that make up an index. Assume the value-weighted index level was 300.45 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Kirk, Inc. Picard Co. Index level Shares Outstanding 40,000 29,000 Price per Share Beginning of Year $38 73 End of Year $ 42 81
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for- one in the last period. P0 Q0 P1 Q1 P2 Q2 A 82 100 87 100 87 100 B 42 200 37 200 37 200 C 84 200 94 200 47 400 a. Calculate the rate of return on a price - weighted index of the three stocks for the first period (t = 0 tot = 1). b. What will be the divisor for the price - weighted index in year 2? c. Calculate the rate of return of the price - weighted index for the second period (t = 1 to t = 2). *note: Please explain why the reture rate for the second period is 0. Thanks!*
Suppose a stock index contains the stock of 3 firms: A Band C. The stock prices for the three firms are $56, $63 and $23, respectively. The firms have 132 milion, 102 million and 110 million shares outstanding, respectively. If the index is value weighted, calculate its initial value. (round your answer to 2 decimal places)
On May 31, 2022, the DJIA opened at 33,224.59. The divisor at that time was 0.15244. What would the new index level be if all stocks on the DJIA increased by $1.00 per share on the next day? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Index level
Assume that the stock market index is trading at a level of 4,500. You can interpret this index level as a scaled price that was set at some point to 100 and appreciates as the stocks included in the index appreciate. The long-term risk-free rate is 1.3%. The aggregate earnings (scaled in the same way as the index level) of the firms in the stock market index are expected to be 132 next year and the payout ratio (dividends as a percentage of earnings) has been 45% and is expected to remain 45%. What additional assumptions can justify the stock market index level of 4,500? Show your calculations and explain your reasoning carefully
Assume a market with five stocks: Stocks A through E. The metric which tracks the market movement is known as the MM-5 index or the MiniMarket – 5 index. Its base value is 500 based on the market capitalization and was set in December 1990. Use the information below in the image to answer the questions: i) Compute the value of MM – 5 Index on December 31, 2020ii) Compute the value of MM – 5 index on December 31, 1990iii) Compare the index values computed in the previous two parts. Has the market risen since the inception of MM – 5? Compute the percentage change between the index values in 1990 and 2020 to substantiate the answer
Consider the three stocks in the following table. P, represents the price at time t, and Q, represents the total shares outstanding at time t. Calculate the rate of return on a price-weighted index of three stocks for the first period (t=0 to t=1). Table 2: Data for Q4 & Q5 Q0 P1 Q1 PO 100 50 105 50 A B 200 100 210 100 C 300 100 250 100
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. P0 Q0 P1 Q1 P2 Q2 A 87 100 92 100 92 100 B 47 200 42 200 42 200 C 94 200 104 200 52 400 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t = 2).

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