Question: Explain how a market index is price weighted In such
Explain how a market index is price weighted. In such a case, would you expect a $100 stock to be more important than a $25 stock? Give an example.
Answer to relevant QuestionsExplain how to compute a value-weighted index.Assume a correlation of 0.82 between the Nikkei and the TSE Composite Index. Examine the correlation between the MSCI Pacific Basin Index and the DJTSM in Exhibit.Explain why these relationships differ.a. Calculate a Dow Jones Industrial Average for days 1 through 5.b. What effects have the splits had in determining the next day's index?Describe the results of a study that supported the semistrong-form EMH. Discuss the nature of the test and specifically why the results support the hypothesis.What does the EMH imply for fundamental analysis? Discuss specifically what it does not imply.
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