# Question

The four stocks listed in the text are part of an index.

Using the prior information,

a. Compute a price-weighted index by adding the stocks’ prices at time t and time t + 1. What is the percentage change in the index?

b. Compute a value-weighted index by adding their market values at time t and time t+1 What is the percentage change in the index?

c. Why is there a difference between your answers to Parts a and b?

Using the prior information,

a. Compute a price-weighted index by adding the stocks’ prices at time t and time t + 1. What is the percentage change in the index?

b. Compute a value-weighted index by adding their market values at time t and time t+1 What is the percentage change in the index?

c. Why is there a difference between your answers to Parts a and b?

## Answer to relevant Questions

A U.S. firm wants to raise $15 million by selling 1 million shares at a net price of $15. We know that some say that firms “leave money on the table” because of the phenomenon of underpricing. a. Using the average ...Describe how the variance and standard deviation are calculated and indicate how they are used as measures of risk. What type of market efficiency—none, weak, semi-strong, or strong—exists under each of the following statements? a) I know which stocks are going to rise in value by looking at their price changes over the past two ...What is meant by the Capital Asset Pricing Model? Describe how it relates to expected return and risk. Using the information below, compute the percentage returns for the following securities:Post your question

0