Use data from the table below to answer this question: Day 0 Day 1 Price # shar
Posted: Fri Jul 01, 2022 7:42 am
Use data from the table below to answer this question:
Day 0 Day 1
Price # shares Price # shares
Stock
A 420 17,000 450 17,000
B 180 23,000 165 23,000
C 1,000 9,000 1,350 9,000
D 45 12,000 60 12,000
Note: the columns, #shares, on day 0 and day 1 indicate the total share outstanding for each stock.
Suppose we want to construct indices using all four stocks above, and we choose the divisor on day 0 to be 1.
Calculate the index level for price-weighted, value-weighted, and equal-weighted indices at day 0 and day 1 (20 points).
After the market is close by the end of day 1, company C announces a 2.5 for 1 stock split, will there be any influence on each index? Explain. (5 points)
Day 0 Day 1
Price # shares Price # shares
Stock
A 420 17,000 450 17,000
B 180 23,000 165 23,000
C 1,000 9,000 1,350 9,000
D 45 12,000 60 12,000
Note: the columns, #shares, on day 0 and day 1 indicate the total share outstanding for each stock.
Suppose we want to construct indices using all four stocks above, and we choose the divisor on day 0 to be 1.
Calculate the index level for price-weighted, value-weighted, and equal-weighted indices at day 0 and day 1 (20 points).
After the market is close by the end of day 1, company C announces a 2.5 for 1 stock split, will there be any influence on each index? Explain. (5 points)