You are a portfolio manager for Big Bucks Wealth Management Pty Ltd. You would like to construct
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Question:
You are a portfolio manager for Big Bucks Wealth Management Pty Ltd. You would like to construct a share price index to track the performance of four stocks in which your fund is considering making a substantial investment. The following table shows the price of each stock at the beginning of the period and the total market capitalisation of each stock in the market.
| ||
Stock | Share price | Market Capitalisation |
Alpha | $18.93 | $150m |
Beta | $16.13 | $122m |
Gamma | $10.8 | $119m |
Delta | $11.95 | $135m |
Suppose you decide you want to construct an index that will never need rebalancing. What will be the weighting of Stock Delta in the index?
a.20.67%
b.25.67%
c.25.00%
d.24.16%
Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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