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1. Use the following information for Problems 1-4. Stock Beginning Price ($) Ending Price ($) A 50 75 Dividend ($) 5.00 B 200 300

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1. Use the following information for Problems 1-4. Stock Beginning Price ($) Ending Price ($) A 50 75 Dividend ($) 5.00 B 200 300 10.00 C 200 150 3.00 1. If A, B, and C form a price-weighted index, compute the price return. 2. If A, B, and C form a price-weighted index, compute the total return. 3. If A, B, and C form an equal-weighted index, compute the price return. 4. If A, B, and C form an equal-weighted index, compute the total return. Use the following information for Problem 5. The data are for a price-weighted index (e.g., Dow 30). Stock Initial Price ($) Final Price ($) A B 500 300 5. 650 420 a) What is the initial value of the index? b) If Stock B does a 2-for-1 split at the beginning of the period, what is the divisor d that preserves the index's value? 6. Over the past five days, Stocks A and B performed as shown below Day % Ret A % Ret B -4 4 6 -3 -6 1 -2 3 -5 -1 8 2 0 Find and interpret the correlation coefficient of returns.

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1 If A B and C form a priceweighted index the price return is calculated by taking the average price change of the constituent stocks Price Return Ending Price Beginning Price Beginning Price For Stoc... blur-text-image

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