eBook Problem 3-2 Price-Weighted Index Consider a price-weighted index like the DJIA with only 3 stocks: Stock A, Stock B, and Stock C. The original and new prices of these stocks, along with the divisor, are shown in the following table. Old Price New Price Stock A Stock B Stock C Divisor $26 $52 $75 0.1 $30 $54 $82 (a) What is the index level at the old prices? The index level at the old prices is (b) If the stock prices change to the new prices, as noted in the table, what would the new index level be? The new index level at the new prices would be (c) Given the change between the old and new prices, what is the index return? Round your answer to 2 decimal places. The index return is % heck My WOPR (d) If Stock C conducted a 2 for 1 stock split, what should the new divisor be? Round your answer to 4 decimal places. The new divisor would be
eBook Problem 3-2 Price-Weighted Index Consider a price-weighted index like the DJIA with only 3 stocks: Stock A, Stock B, and Stock C. The original and new prices of these stocks, along with the divisor, are shown in the following table. Old Price New Price Stock A Stock B Stock C Divisor $26 $52 $75 0.1 $30 $54 $82 (a) What is the index level at the old prices? The index level at the old prices is (b) If the stock prices change to the new prices, as noted in the table, what would the new index level be? The new index level at the new prices would be (c) Given the change between the old and new prices, what is the index return? Round your answer to 2 decimal places. The index return is % heck My WOPR (d) If Stock C conducted a 2 for 1 stock split, what should the new divisor be? Round your answer to 4 decimal places. The new divisor would be
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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Problem 3-2 Price-Weighted Index
Consider a price-weighted index like the DJIA with only 3 stocks: Stock A, Stock B, and Stock C. The original and new prices of these stocks, along with the divisor,
are shown in the following table.
Old Price New Price
Stock A
Stock B
(c)
Stock C
Divisor
$26
$52
$75
0.1
$30
$54
(a) What is the index level at the old prices?
The index level at the old prices is
$82
(b) If the stock prices change to the new prices, as noted in the table, what would the new index level be?
The new index level at the new prices would be
%
Given the change between the old and new prices, what is the index return? Round your answer to 2 decimal places.
The index return is
Question 2 of 10 ►
(d)
If Stock C conducted a 2 for 1 stock split, what should the new divisor be? Round your answer to 4 decimal places.
The new divisor would be
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