Chapter 5 Homework 8 10 points Saved The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/22 1/1/23 1/1/24 Douglas McDonnell Dynamics General 345 450 $ 94 66 $ 97 61 $ 109 75 eBook International 310 95 84 101 Rockwell Print a. Calculate the initial value of the index if a value-weighting scheme is used. Note: Round your answer to 2 decimal places. Index value References b. What is the rate of return on this index for the year ending December 31, 2022? For the year ending December 31, 2023? Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 2022 return 2023 return % % Help Save & C
Chapter 5 Homework 8 10 points Saved The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares (millions) 1/1/22 1/1/23 1/1/24 Douglas McDonnell Dynamics General 345 450 $ 94 66 $ 97 61 $ 109 75 eBook International 310 95 84 101 Rockwell Print a. Calculate the initial value of the index if a value-weighting scheme is used. Note: Round your answer to 2 decimal places. Index value References b. What is the rate of return on this index for the year ending December 31, 2022? For the year ending December 31, 2023? Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 2022 return 2023 return % % Help Save & C
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
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Transcribed Image Text:Chapter 5 Homework
8
10
points
Saved
The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believes
these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if
the total value of all firms in the market is $5 billion, the index would be quoted as 500.
Price
Shares (millions)
1/1/22
1/1/23
1/1/24
Douglas McDonnell
Dynamics General
345
450
$ 94
66
$ 97
61
$ 109
75
eBook
International
310
95
84
101
Rockwell
Print
a. Calculate the initial value of the index if a value-weighting scheme is used.
Note: Round your answer to 2 decimal places.
Index value
References
b. What is the rate of return on this index for the year ending December 31, 2022? For the year ending December 31, 2023?
Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a
percent rounded to 2 decimal places.
2022 return
2023 return
%
%
Help
Save &
C
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