Use the data below to determine which of the statements is most accurate? As of December 31, Company X Y Z Stock Price $25 $50 $100 Shares Outstanding 20,000 20,000 1,000 a) For a given percentage change in stock price, company Y will have less impact on the market-cap weighted index as company Z. b) A 100% increase in the stock price of company X will have a smaller impact on the price-weighted index than a 100% increase in the stock price of company Z. c) For a given percentage change in the stock price, company X will have a greater impact on the market-cap weighted index than companies Y & Z
Use the data below to determine which of the statements is most accurate? As of December 31, Company X Y Z Stock Price $25 $50 $100 Shares Outstanding 20,000 20,000 1,000 a) For a given percentage change in stock price, company Y will have less impact on the market-cap weighted index as company Z. b) A 100% increase in the stock price of company X will have a smaller impact on the price-weighted index than a 100% increase in the stock price of company Z. c) For a given percentage change in the stock price, company X will have a greater impact on the market-cap weighted index than companies Y & Z
Chapter14: Investing In Stocks And Bonds
Section: Chapter Questions
Problem 1DTM
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Use the data below to determine which of the statements is most accurate?
As of December 31,
Company X Y Z
Stock Price $25 $50 $100
Shares Outstanding 20,000 20,000 1,000
a) For a given percentage change in stock price, company Y will have less impact on the market-cap weighted index as company Z.
b) A 100% increase in the stock price of company X will have a smaller impact on the price-weighted index than a 100% increase in the stock price of company Z.
c) For a given percentage change in the stock price, company X will have a greater impact on the market-cap weighted index than companies Y & Z.
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