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) Index value Shares (millions) 545 460 190 1/1/22 $80 70 Douglas McDonnell Dynamics General International Rockwell a. Calculate the initial value of the index if a price-weighting scheme is used. 2022 return 2023 return Price 1/1/23 5:83 63 88 99 1/1/24 $.98 77 102 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.
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) Index value Shares (millions) 545 460 190 1/1/22 $80 70 Douglas McDonnell Dynamics General International Rockwell a. Calculate the initial value of the index if a price-weighting scheme is used. 2022 return 2023 return Price 1/1/23 5:83 63 88 99 1/1/24 $.98 77 102 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.
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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Transcribed Image Text:The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager belleves
these stocks are an appropriate benchmark for his or her performance)
Index value
Shares (millions) 1/1/22
$80
70
99
Douglas McDonnell
Dynamics General
International
Rockwell
a. Calculate the initial value of the index if a price-weighting scheme is used.
2022 return
2023 return
Price
1/1/23
5:83
63
545
460
190
1/1/24
$ 98
77
102
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.
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