What is the relative change in a market value-weighted index? Enter your answer as a decimal number or with the percentage sign.

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
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solve the 2nd parts correctly

To find the change in a price-weighted index, we can add up the prices across the three stocks and express
the difference between time 0 and time 1 in percentage terms:
Shares
Price
Stock (million) 2019 2020
A
85
141
115
B
114
93
98
300
46
60
Total
280 273
273 – 280
Relative change
2.5 %
= -0.025
280
Part 2
What is the relative change in a market value-weighted index? Enter your answer as a decimal number or
with the percentage sign.
3+ decimals
Transcribed Image Text:To find the change in a price-weighted index, we can add up the prices across the three stocks and express the difference between time 0 and time 1 in percentage terms: Shares Price Stock (million) 2019 2020 A 85 141 115 B 114 93 98 300 46 60 Total 280 273 273 – 280 Relative change 2.5 % = -0.025 280 Part 2 What is the relative change in a market value-weighted index? Enter your answer as a decimal number or with the percentage sign. 3+ decimals
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