ATTEMPT THE FOLLOWING QUESTIONS QUESTION 1 The following information relates to the prices and dividends of two stocks listed on the Ghana Stock Exchange as well as the average market returns. Year 2011 2012 2013 2014 2015 2016 Stock A Price 20 24 26 31 33 40 Div 0 25 1.2 0.5 1 1.5 2 Price HEE 11 13 17 20 23 27 Stock B Div 0 1.6 0.5 0.9 1.2 1.5 Market Returns 0 0.25 0.18 0.11 0.12 0.15

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Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.