The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believesthese stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 3-for-1 stock split on January 1, 2023.Douglas McDonnellDynamics GeneralInternationalRockwellNew divisorShares (millions)205450290Rate of returna. What is the new divisor for the index?Note: Do not round intermediate calculations. Round your answer to 3 decimal places.76.0001/1/22$ 1034877Price1/1/23$ 109446619.18 %1/1/24$1235880b. Calculate the rate of return on the index for the year ending December 31, 2023, if Douglas McDonnell's share price on January 1,2024, is $38.40 per share.Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

Stock index:An extensive statistical metric used to evaluate the performance of a particular subset…

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). Suppose that Douglas McDonnell shareholders approve a 3- for-1 stock split on January 1, 2023. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 205 450 290 a What is the new divisor for the index? 1/1/22 $ 103 48 77 Price 1/1/23 $ 109 44 66 1/1/24 $123 58 80

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). Suppose that Douglas McDonnell shareholders approve a 3- for-1 stock split on January 1, 2023. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 205 450 290 a What is the new divisor for the index? 1/1/22 $ 103 48 77 Price 1/1/23 $ 109 44 66 1/1/24 $123 58 80

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

See similar textbooks

Similar questions

The following information is related to X corporation: X's Beta was 1.3, market index 1 January 2020 was 100, market index 31 December 2020 was 110 and interest on treasury bills was 0.03 (risk free). Stock returns using the capital assets pricing model Question 20Answer a. 0.132 b. 0.143 c. 0.112 d. 0.121
You construct a price-weighted index of 49 stocks. At the beginning of the day, the index is 6,725.88. During the day, 48 stock prices remain the same, and 1 stock price increases $5.70. At the end of the day, your index value is 6,749.19. What is the divisor on your index? Note: Do not round intermediate calculations. Round your answer to 8 decimal places. what is the Divisor?
Suppose a stock index contains the stock of 3 firms: A, B and C. The stock prices for the three firms are $30, $21 and $39, respectively. The firms have 98 million, 127 million and 130million shares outstanding, respectively. If the index is value-weighted, calculate its initial value.
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following November 2019 expiration options on a single share, assuming that the stock price on the expiration date is $143. (Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.)
Am. 12.
In its 10Q dated February 4, 2022, LLL, Incorporated, had outstanding employee stock options representing over 285 million shares of its stock. LLL accountants estimated the value of these options using the Black - Scholes - Merton formula and the following assumptions:S = current stock price = $28.89K = option strike price = $31.32r = risk-free interest rate = 0.057 = stock volatility = 0.29T = time to expiration = 3.5 yearsWhat was the estimated value of these employee stock options per share of stock? (Note: LLL pays no dividends.) Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Consider a December 310 call and a December 310 put, both on a stock that is currently selling for $340/share. Calculate how much these options are in or out of the money.
es 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): Douglas McDonnell Dynamics General International Rockwell Index value Shares (millions) 420 450 250 2022 return 2023 return a. Calculate the initial value of the index if a price-weighting scheme is used. 1/1/22 $ 63 53 82 Price 1/1/23 $ 67 47 71 % % 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. 1/1/24 $ 84 61 87
Consider 2 stocks in the following table. We create a stock index of companies that make stuff for Spring Break. stocks PO Q0 P1 Q1 ABC, Inc. $850P0 150Q0 $ 830P1 150Q1 XYZ, Inc. $510P0 400Q0 $550P1 400Q1 What is the initial portfolio weight for stock ABC in a Price - weighted index of these two stocks
Two shares X and Y are currently trading for $100 and $50. They are expected to pay dividends of $1 and $0.5 respectively for the next year. The expectations about the price of those two securities for three possible scenarios are summarized below. The market’s standard deviation is 0.10 and correlation between market and share X is 0.5 and correlation between market and share Y is 0.10. Scenarios Prices of share X Prices of share Y Probability Pessimistic $79 $45.5 0.2 Most likely $104 $54.5 0.5 Optimistic $124 $59.5 0.3 Find the expected return and standard deviation of a portfolio consisting of 30% invested in share X and 70% invested in share Y. Find the beta coefficient of the portfolio
The EV Index is a price weighted stock index based on the 3 largest electric vehicle manufacturers in the nation. Consider these stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. (Please pay close attention to stock split) P0 Q0 P1 Q1 P2 Q2 A 80 200 85 200 90 200 B 60 300 70 300 35 600 C 65 200 67 200 70 200 a. What is the divisor for the price weighted index in year 2?2.69 (sample answer: 2.55) b. What is the price weighted index at t=1? 64 (sample answer: 156.45) c. What is the price weighted index at t=2? 70.63(1sample answer: 56.45)
Demonstrate the impact of different values on a market value weighted stock index with a hypothetical example considering three stocks (stock A, B and C), no. of shares and price for base year 2020 and for the year 2021 with two different cases Case A and Case B ( base year index value as 100)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS