# Question: The four stocks listed in the text are part of

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?

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