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). Assume the index is scaled by a factor of 10 million; that is, ifthe total value of all firms in the market is $5 billion, the index would be quoted as 500.Douglas McDonnellDynamics GeneralInternationalRockwellShares (millions)2154551/1/22$ 64Price1/1/231/1/2472. $ 6864$ 827825010190106a. Calculate the initial value of the index if a value-weighting scheme is used.Note: Round your answer to 2 decimal places.Index value49,045.00b. 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 valué should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.2022 return2023 return

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Answered: The following three defense stocks are…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In addition to price-weighted and value-weighted indexes, an equally weighted index is one in which the index value is computed from the average rate of return of the stocks comprising the index. Equally weighted indexes are frequently used by financial researchers to measure portfolio performance. The following three defense stocks are to be combined into a stock index in January 2010 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Price Shares (millions) 1/1/10 1/1/11 1/1/12 Douglas 360 $65 $69 $ 83 McDonnell Dynamics 450 52 46 60 General International Rockwell 170 81 70 86 a. Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 31, 2010. (Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. Omit the "%" sign in your response.) Index return % b. If the index value is set to 100 on January 1, 2010, what will the index value be…
Manshuk
Three stocks are included in the price-weighted 6ULE stock index. Their current share prices are shown below: Annuity Manufacturing Perpetuity Production, Inc. Additivity Amalgamated Company If the current value of the 6ULE index is 1000, what is the current divisor? 1.00 0.27 0.60 0.90 Current Price $65 $111 $94 0.54
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 New divisor Shares (millions) 205 450 290 Rate of return a. What is the new divisor for the index? Note: Do not round intermediate calculations. Round your answer to 3 decimal places. 76.000 1/1/22 $ 103 48 77 Price 1/1/23 $ 109 44 66 19.18 % 1/1/24 $123 58 80 b. 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.
Changing index values in a value-weighted index. In 2015 Carlo Elise have several stocks that make-up his portfolio. Stock A with a price of P275.50 and shares outstanding of 2,500, for Stock B with a market value of P140.625.00 with 1,500 shares, for Stock C that has a market value of P279.450.00 at P155.25 and Stock D that has 150 shares outstanding with a market price of P475.00. In 2016, shares prices of Stock A and D go up by 20% while the others go down by a similar rate with additional purchase of 500 and 750 stocks for B and C respectively except for stock E that stays the same with a market value of P138,125 at 2,500 shares. In 2016, how much is the total value for Stock D?
Consider a market value-weighted index consisting of 3 stocks: A, B, and C. The stocks' prices at time 0 (p0) and time 1 (p1) are given below, along with the number of shares outstanding. Calculate the index levels at time 0. Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321. stock p0 p1 outstanding shares 43 45 200 69 50 500 11 12 600 A B C
A price weighted stock index has stocks AAC, BZF, and CHO in it. It is at 550 on 21-Oct-2019. CHO is replaced at the end of day trading on 22-Oct-2019 with DIY. What is the value of the index on 22-Oct-2019 (take the answer to 2 decimal places)? AAC BZF CHO DIY 21-Oct-19 $75.00 $150.00 $10.00 $106.00 22-Oct-19 $80.00 $140.00 $12.00 $107.00 23-Oct-19 $82.00 $135.00 $8.00 $104.00 Shares Outstanding (in thousands) 1,000 800 50,000 8,000
The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Douglas McDonnell Dynamics General International Rockwell Index return Shares (millions) 195 455 230 % Index value 1/1/19 $ 97 27 56 Price a. Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 31, 2019. (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 1/1/20 $100 22 45 1/1/21 $113 36 62 b. If the index value is set to 100 on January 1, 2019, what will the index value be on January 1, 2020? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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). Suppose that Douglas McDonnell shareholders approve a 3-for-1 stock split on January 1, 2023. Douglas McDonnell Dynamics General International Rockwell New divisor Shares (millions) 1/1/22 Rate of return 340 458 % 45 Price 1/1/23 a. What is the new divisor for the index? Note: Do not round intermediate calculations. Round your answer to 3 decimal places. $ 106 39 63 1/1/24 $ 118 53 79 b. 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 $39.33 per share. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Finance
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.)
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

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